1995 FINANCIAL REVIEW

     The following  Financial  Review  includes a discussion of the accounts and
operations of the Company and certain  actions taken by Ethyl  Corporation  that
affect them.

     The most  recent  action  is the  Company's  acquisition  of the  worldwide
lubricant  additives  business of Texaco Inc. on February  29,  1996.  While the
following  financial review does not discuss this 1996 transaction,  its effects
are  discussed  in the  subsequent  event  footnote  (See  Note 21 of  Notes  to
Financial  Statements  on page 44),  which also  includes  certain  supplemental
financial statement information.

     The actions taken by the Company also include the September 15, 1994,  sale
of its wholly owned pharmaceuticals subsidiary,  Whitby,  Inc. Earlier in that
year, at the close of business on February 28, 1994,  the Company  completed the
tax-free  spin-off  of  its  wholly-owned   subsidiary,   Albemarle  Corporation
(Albemarle),  which  included  the  operations  of the olefins and  derivatives,
bromine chemicals and specialty  chemicals  businesses.  The results of both the
pharmaceuticals  subsidiary  and  Albemarle  are  included  in the  consolidated
results through those dates.

     The Company also completed the tax-free  spin-off of its  approximately 80%
interest  in First  Colony  Corporation  (First  Colony) on July 1, 1993,  which
included  the  operations  of First Colony Life  Insurance  Company and subsidi-
aries.  The accounts and  operations  of the  Insurance  segment are reported as
"Discontinued Insurance Operations" through that date.

     In addition to the consolidated  information discussed for 1995 versus 1994
and 1994 versus 1993,  pro forma  information  is also provided and discussed to
illustrate the Company's results without the prior-year  results of the spun-off
businesses of Albemarle  Corporation  and First Colony Corporation.  Pro forma
Statements  of  Income  for  prior  years  also are  provided  as  supplementary
information on page 35.

RESULTS OF OPERATIONS
1995 Compared to 1994

NET SALES

     Net sales for 1995 were $960.5  million,  down from $1.17  billion in 1994.
The  reduction  in net sales  resulted  primarily  from the absence of Albemarle
sales in 1995 versus two months of Albemarle sales included in 1994.

     Net sales for 1995 of $960.5  million  were down about $58.6  million  (6%)
from pro forma  (excluding  Albemarle)  net sales of $1.02 billion in 1994.  The
decrease  from  pro  forma  net  sales   primarily   reflected  the  absence  of
pharmaceutical  sales during 1995 versus $48.7 million of sales in 1994 prior to
the sale of this  business on September  15, 1994,  as well as $9.9 million (1%)
lower sales revenue from the petroleum additives business.

     The lower petroleum  additives  revenues were due to lower shipments ($60.7
million), largely offset by the impact of higher selling prices ($50.8 million).
The decrease in shipments reflected  lower  shipments of antiknocks,  lubricant
additives and certain other fuel additives, partly offset by increased shipments
of other refinery fuel additives.  Lead antiknock sales were slightly lower than
the prior year, but the effect of lower  shipments  was nearly offset by higher
selling  prices while sales of certain other fuel additives were well behind the
prior year. Lubricant additives sales were about even with the prior year, while
sales of other refinery fuel additives improved in 1995 from the prior year.

COSTS AND EXPENSES

     Cost of goods sold in 1995  decreased to $636.1 million from $776.5 million
in 1994. The decline in aggregate cost of goods sold occurred  primarily because
of the absence of Albemarle costs during 1995 versus the inclusion of two months
of Albemarle cost of goods sold in 1994.

     Cost of goods sold in 1995 of $636.1  million was down about $21.3  million
(3%) from 1994 pro forma  cost of goods  sold of $657.4  million.  The  decrease
reflected  primarily  the absence of  pharmaceutical  cost of sales  during 1995
versus  about  $16.6  million  in the  1994  period  prior  to the  sale of this
business, and also about $4.7 million lower petroleum additives business cost of
goods sold. The lower petroleum  additives  business cost of goods sold reflects
lower shipments ($35.3 million),  primarily of antiknocks,  lubricant  additives
and other fuel additives,  largely offset by higher costs ($30.6  million).  The
higher costs  include  expenses  reflecting  the Company's  fourth-quarter  1995
decision to terminate a supply  contract  early,  the costs  associated with the
mid-year  shutdown of operations at a contract  manufacturing  site,  costs of a
strike at Feluy,  and higher per-unit raw material  costs,  partly offset by the
lower costs  associated  with starting up the recently  completed  facilities at
several plants (about $4.8 million in 1995 versus about $7.7 million in 1994).

     Average raw materials costs increased  slightly in 1995 over pro forma 1994
due to higher costs of purchased  components  and to foreign  exchange.  Average
energy costs were largely  unchanged,  as lower electricity and steam costs were
substantially offset by higher natural gas prices.

     As a result  of a 6%  decrease  in 1995 net  sales  from 1994 pro forma net
sales and a 3%  decrease  in 1995 cost of goods sold from 1994 pro forma cost of
goods sold,  the gross profit margin  decreased to 33.8% in the 1995 period from
35.5% in the 1994 period.  However,  excluding the impact of the pharmaceuticals
business  in 1994,  the  gross  profit  margin  would  have been 34% in the 1994
period.

     Selling,  general  and  administrative  expenses  combined  with  research,
development and testing expenses decreased to $177.2 million in 1995 from $227.1
million  in  1994.   The  decline   reflects  the  absence  of   Albemarle   and
pharmaceuticals expenses in 1995 versus their inclusion in 1994.

     Selling,   general  and  administrative   expenses,   including   research,
development  and testing  expenses,  in 1995 of $177.2  million  were down $26.8
million  (13%)  from pro forma  1994  expenses  of $204  million.  The  decrease
reflects  primarily the absence of expenses of Whitby,  Inc., during 1995 versus
about  $31.1  million  in  expenses  during  1994  prior  to  the  sale  of  the
pharmaceuticals  business in September 1994,  partially offset by a $4.3 million
increase in petroleum  additives  expenses.  This  increase was primarily due to
higher  research,  development  and  testing  expenses  largely  related  to MMT
approval  activities and higher  salaries and benefits  costs,  partly offset by
lower outside  consulting  costs in 1995 and the 1994 charges related to closing
certain research facilities and certain organizational expenses. As a percentage
of net sales, selling, general and administrative expenses,  including research,
development and testing  expenses,  decreased to 18.5% in 1995 from 20% on a pro
forma basis in 1994.

SPECIAL CHARGES

     The $4.75 million  special charge in 1995 ($4.1 million after income taxes,
or $.04 a share) reflects a provision for an anticipated  legal settlement by an
Ethyl subsidiary with the civil division of the U.S. Department of Justice.  The
$2.7 million of special items in 1994 ($1.7 million after income taxes,  or $.01
a  share)  consists  of  an  $8  million  provision  for  future   environmental
remediation and $2.7 million of other nonrecurring charges, largely offset by an
$8 million gain on the settlement of a lawsuit.

OPERATING PROFIT

     Operating  profit in 1995 was  approximately  15% lower than  during  1994,
which included two months  operating  profit of Albemarle.  Operating  profit in
1995 of  $142.4  million  was  $12.5  million  (8%)  lower  than  1994 pro forma
operating profit of $154.9 million.  The decrease  resulted from lower shipments
(approximately  $25.4  million)  partly offset by higher  margins in antiknocks.
Lower operating profit in lubricant  additives largely reflected lower shipments
and flat margins,  while other fuel additives  results reflected lower shipments
and  lower  margins.  This was  partly  offset by higher  operating  profits  in
refinery fuel  additives due to higher  shipments and margins,  while  antiknock
operating  profit was  essentially even with the prior year.  Higher  research,
development  and testing  expenses in lubricant and certain fuel  additives also
contributed to the lower margins.

     Further  discussion of the lead antiknock  profit  contribution  is covered
under Information About Significant Product Lines beginning on page 19.

INTEREST AND FINANCING EXPENSES

     Interest and financing  expenses in 1995  increased  slightly from the 1994
period reflecting a lower amount of interest capitalized substantially offset by
the  absence  in 1995  of  interest  included  in 1994  for two  months  on debt
transferred  to  Albemarle.  Interest  and  financing  expenses in 1995 of $26.8
million  increased $4.3 million (19%) over 1994 pro forma interest and financing
expenses of $22.5  million.  The increase was primarily due to a lower amount of
interest  capitalized in 1995 ($5.7  million),  a higher  average  interest rate
($0.6  million),  partly  offset  by the  impact  of a lower  average  amount of
long-term debt outstanding during the 1995 period ($2 million).

OTHER (INCOME) EXPENSES, NET

     Other (income)  expenses,  net, was $0.6 million income in 1995 versus $1.2
million in expenses in 1994.  On a pro forma basis,  other  expenses  would have
been $1.8  million in 1994.  The $2.4  million  increase in other income in 1995
from the 1994 pro forma reflects $0.8 million in additional interest income from
greater  amounts  invested  in  short-term  securities  in 1995 than in the 1994
period,  as well as a net  increase in income from various  nonoperating  items,
none of which was individually material.

INCOME TAXES

     Income  taxes in the 1995  period  were $42.2  million,  down about 3% from
$43.4 million in 1994 on income before  income taxes that  decreased  almost 18%
from the prior year,  largely  reflecting  an increase  over the  unusually  low
effective tax rate in 1994 (36.3% in 1995 versus 30.7% in 1994). Income taxes in
1995 increased 8% from pro forma income taxes of $39.2 million in 1994, in spite
of an 11% decrease in income  before  income  taxes due to an increase  over the
previously  mentioned  unusually low effective income tax rate in 1994 (36.3% in
1995 versus 30% in 1994). The 1994 effective tax rate was unusually low, largely
reflecting  the tax benefit on the sale of Ethyl's  pharmaceuticals  subsidiary,
Whitby,  Inc.,  which had a higher  tax basis than book  basis.  (See Note 16 of
Notes to  Financial  Statements  on page 42 for details of changes in  effective
income tax rates.)

1994 Compared to 1993

NET SALES

     Net sales for 1994 were $1.17 billion, down from $1.94 billion in 1993. The
reduction in net sales  resulted  primarily  from two months of Albemarle  sales
being included in 1994 versus 12 months of Albemarle sales included in 1993.

     On a pro forma basis, without the spun-off  businesses,  net sales for 1994
would have been $1.02 billion, down about $16 million (2%) from $1.03 billion in
1993.  The decrease in pro forma net sales  reflected  the effect of the sale of
the  pharmaceuticals  business in September 1994, with  pharmaceutical  revenues
decreasing  by about $22.9  million,  partially  offset by about $6.9 million in
higher  sales  revenue  from the  petroleum  additives  business.  The  increase
represents  about $42.8  million from sales price  increases,  partly  offset by
$35.9 million from lower shipments. Lubricant additives sales increased slightly
due to higher  selling  prices,  primarily in the U.S.,  largely offset by lower
shipments, while lower fuel additives sales reflected lower selling prices. Lead
antiknock  sales were about even with the prior year,  as lower  shipments  were
substantially  offset by higher  selling  prices.  Other refinery fuel additives
sales increased due to higher shipments and selling prices.

COSTS AND EXPENSES

     Cost of goods sold in 1994  decreased to $776.5  million from $1.39 billion
in 1993. The decline in aggregate cost of goods sold occurred  primarily because
of the inclusion of two months of Albemarle cost of goods sold in 1994 versus 12
months included in 1993.

     On a pro forma  basis,  cost of goods sold in 1994  would have been  $657.4
million in 1994,  down about $17.9  million  (3%) from  $675.3  million in 1993.
About $10.7  million of the decrease  reflected  lower  antiknock  and lubricant
additives  shipments,  partly  offset by higher  cost of goods sold per unit and
increased   shipments  of  other  refinery  fuel   additives.   The  absence  of
pharmaceuticals  cost of goods  sold  following  the sale of the  business  also
contributed about $5.6 million to the reduction of cost of goods sold. Lubricant
additives  cost of goods  sold  reflected  higher  costs per unit due in part to
start-up costs of $7.7 million  associated with the  construction and completion
of new and expanded  lubricant  additives  manufacturing  facilities  to replace
production provided by Amoco under a short-term supply agreement,  partly offset
by higher costs incurred in 1993 resulting from an inventory-reduction  program.
Lead antiknock costs were higher due to product sourcing.

     On a pro forma basis,  average raw material unit costs were slightly  lower
in 1994 than in 1993.  Process oils and polybutene  costs were lower, but olefin
costs  increased and other raw material  costs were mixed.  Average energy costs
were  mixed,  with  natural  gas  prices  lower  in  1994  than in  1993,  while
electricity costs remained stable.

     On a pro forma basis,  the gross profit  margin  increased to 35.5% in 1994
from 34.8% in 1993, primarily due to improvements in lubricant additives as well
as in lead antiknocks.

     Selling,   general  and   administrative   expenses   including   research,
development and testing expenses decreased to $227.1 million in 1994 from $348.4
million in 1993  primarily  reflecting  the effect of the spin-off of Albemarle.
The  discontinuance of pharmaceuticals  research  operations of Whitby Research,
Inc.,  at the  end of 1993 as well as the  absence  of  Whitby,  Inc.,  expenses
following the September  sale also  contributed  to the decline.  On a pro forma
basis,  selling,  general  and  administrative  expenses,   including  research,
development  and testing  expenses,  would have been $204 million in 1994,  down
$7.9 million (4%) from $211.9 in 1993. The decrease  primarily  reflects an $8.4
million  effect  from  the  discontinuance  of  the   pharmaceuticals   research
operations of Whitby  Research,  Inc., at the end of 1993 and a decline of $11.4
million of Whitby, Inc., expenses after the sale of the pharmaceuticals business
in September 1994. These decreases were offset partly by a $6.4 million increase
in  research,  development  and testing  expenses  for the  petroleum  additives
businesses  and higher  expenses  for  outside  consulting.  The  benefit of the
work-force-reduction  program  implemented at the end of 1993 was largely offset
by increases in other employee related costs.

     As a percentage of net sales, selling, general and administrative expenses,
including  research,  development and testing expenses  decreased to 20% in 1994
from 20.5% in 1993.

SPECIAL CHARGES

     The $2.7  million of special  charges in 1994 ($1.7  million  after  income
taxes,  or $ .01 per share)  consists  primarily of an $8-million  provision for
future  environmental  remediation as well as $2.7 million in other nonrecurring
charges, largely offset by an $8 million benefit from a legal settlement.

     The $36.1  million of special  charges in 1993 ($22.4  million after income
taxes,  or $.19 per  share)  resulted  from the  development  of a  Company-wide
restructuring  plan which was designed to focus the Company on certain  business
operations,  reduce  operating costs and position the Company for maximum growth
potential.   These  special  charges  would  not  have  occurred   without  this
restructuring  plan,  which included the  provisions  for corporate  downsizing,
plant write-down and related costs. The plant write-down was a noncash charge of
$11.4 million,  which has reduced  depreciation  and  amortization by about $1.5
million a year, but which was  substantially  offset by higher per-unit costs of
the lead antiknock fluids obtained through the Octel  Agreement.  The pro forma
special  charges in 1993 would have amounted to $28.8  million  ($17.8  million
after income taxes, or $.15 per share) consisting primarily of a charge of $14.2
million  related to the decision  to  discontinue  production  at the  Canadian
antiknock facility in 1994, (including an $11.4 noncash charge for write-down of
facilities as well as severance and other related  costs),  a $6 million  charge
covering downsizing costs of Whitby Research, Inc., prior to sale in April 1994,
and  an  $8.6 million   charge  for  various   early   retirement   and  other
work-force-reduction  programs  affecting  approximately  175  employees  in the
petroleum  additives  and  corporate  staffs in the U.S. and Europe,  as well as
relocation costs for certain research and development and administrative groups.
All of the early  retirements and work-force  reductions were completed in early
1994, and  substantially all of the relocations were completed by year-end 1994.
The differences between amounts accrued and costs incurred were de minimis.

OPERATING PROFIT

     Operating  profit in the 1994  period  was  essentially  even with the 1993
period.  However,  1994 included only two months of Albemarle  operating  profit
compared with 12 months of Albemarle operating profit in 1993.  Operating profit
also  reflected  the impact of special  charges of $2.7  million in 1994  versus
$36.1 million in 1993.

     On a pro forma basis,  operating profit in the 1994 period would have shown
an increase of $36 million,  or 30% from 1993, of which $26.1 million was due to
lower special charges in 1994.  Excluding the effects of these special  charges,
pro forma  operating  profit in 1994  increased 7% from 1993,  primarily  due to
higher  profit in  lubricant  additives,  reflecting  higher  margins  primarily
resulting from higher selling prices and improved product mix, as well as higher
pharmaceuticals  profit due to the year-end  1993  shutdown of Whitby  Research,
Inc. This was partly offset by lower fuel additives  profit due to lower margins
and higher  research,  development  and testing  expenses for this product line.
Lead  antiknock  profit in 1994  improved  over  1993,  excluding  the effect of
special charges, primarily because of higher margins in 1994.

INTEREST AND FINANCING EXPENSES

     Interest and financing  expenses in 1994 decreased 42% from the 1993 period
primarily  reflecting the reduction of interest expense  resulting from the debt
transferred  to Albemarle as part of the  spin-off.  On a pro forma basis,  1994
interest and financing  expenses  would have  decreased  $4.2 million (16%) from
1993 due to a $2.2 million  increase in interest  capitalized in 1994 and a $9.6
million  benefit  from a lower  average  interest  rate in 1994 due to the early
redemption of the  Company's  9 3/8%  sinking fund  debentures in December
1993, partly offset by an increase in interest of about $7.6 million reflecting
higher average debt outstanding during the 1994 period.

OTHER EXPENSES (INCOME), NET

     Other expenses (income),  net, amounted to $1.2 million in expenses in 1994
versus $10 million  income in 1993. On a pro forma basis,  other  expenses would
have been $1.8 million in 1994 versus $8.3 million income in 1993. The reduction
in other income on both a  consolidated  and pro forma basis  primarily  results
from the inclusion in 1993 of a pretax gain of about $5.9 million on the sale of
a  financial-services  subsidiary as well as lower  interest  income and certain
charges associated with the sale of Whitby, Inc., in 1994.

INCOME TAXES

     Income tax expense in 1994 was  essentially  even with 1993,  reflecting  a
lower  1994  effective  tax rate  (30.7% in 1994  versus  32.6% in 1993) on a 6%
increase in income  before  income taxes,  extraordinary  item and  discontinued
insurance  operations.  On a pro forma  basis,  income  taxes in 1994 would have
increased  48%,  reflecting  a 30%  increase  in  income  before  income  taxes,
extraordinary item and discontinued  insurance  operations,  as well as a higher
effective  income  tax  rate  (30% in 1994  versus  26.2%  in  1993).  Both  the
consolidated  and pro forma effective tax rates  reflected  various tax benefits
(1994-from the sale of Ethyl's pharmaceuticals subsidiary,  Whitby, Inc.;
1993-from  the  downsizing  of  Whitby  Research,  Inc.,  and  from  the  sale
of a financial-services  subsidiary).  The 1993 rate also included  one-time
charges from 1993 tax  legislation,  and also  reflected the absence of a tax
benefit on operating losses of the Company's former Belgian subsidiary,  which
was included as part of the spin-off of Albemarle.

EXTRAORDINARY ITEM

     In December  1993, the Company  redeemed its $116.25  million 9 3/8%
Sinking Fund  Debentures,  resulting  in an  after-tax  charge of $5  million
($.04 per share). See Note 19 of Notes to Financial Statements on page 43.

DISCONTINUED INSURANCE OPERATIONS

     The Company spun off its  approximate  80% interest in First Colony on July
1, 1993. Accordingly, no income from the insurance operation was reported in the
1994 period, whereas $90.5 million was reported in the 1993 period.

INFORMATION ABOUT
SIGNIFICANT PRODUCT LINES

     Lead antiknock  compounds,  which are sold worldwide to petroleum refiners,
remain one of the Company's largest product lines. The Company estimates that it
accounts  for  approximately  one-third  of the  total  worldwide  sales of lead
antiknock compounds.

     Lead antiknock  compounds have been subject to regulations  restricting the
amount of the product  that can be used in gasoline in the United  States  since
the 1970s and in Canada since 1990. The North American market for these products
in motor vehicles has effectively been eliminated,  but the market for their use
in piston aircraft and certain other applications has remained at about the same
level for years and is expected to remain stable.  As the Company has forecasted
and planned,  the market for lead  antiknock  compounds in other major  markets,
particularly  Western  Europe,  continues  to  decline  as the  use of  unleaded
gasoline grows.

     On a  consolidated  basis,  including  prior year  operations  of  spun-off
businesses  while they were part of Ethyl,  the  contribution  of lead antiknock
compounds to the Company's net sales was about 26% in 1995,  22% in 1994 and 13%
in 1993. The lead antiknock  profit  contribution to the Company's  consolidated
operating profit,  excluding  allocation of corporate expenses,  is estimated to
have been 74% in 1995, 56% in 1994 and 49% in 1993.

     On a pro forma basis,  excluding the spun-off businesses,  the contribution
of lead  antiknock  compounds to net sales would have been about 25% in 1994 and
1993. On a pro forma basis, the estimated contribution to operating profit would
have been approximately 60% in 1994 and 70% in 1993.

     In recent years,  the Company has been able to offset a continuing  decline
in shipments of lead  antiknock  compounds  with higher margins due primarily to
increases in selling  prices.  Any further decline in the use of lead antiknocks
would adversely  affect such sales and profit  contributions  unless the Company
can offset such declines with increased margins.

     The Company has an agreement with The  Associated  Octel  Company  Limited
("Octel")  of London,  England, under  which  Octel  allocates a portion of its
production  capacity  of lead antiknock  compounds  to the Company for sale and
distribution  through the Company's worldwide  network,  and as a result,  the
Company has discontinued production of lead antiknock compounds. The Company had
previously  produced some of its lead  antiknock  compounds at its  subsidiary's
Canadian  plant, and  prior  to July  1994,  the  Company obtained  additional
quantities under a supply  agreement with E.I. DuPont de Nemours & Company.  The
Octel  agreement continues  as long as the  Company determines  that a  market
continues to exist for lead antiknock compounds. Under the agreement with Octel,
which  is cancelable  at  the  Company's option  with  no  minimum   purchase
obligations,  the  Company  has the  right to  purchase  from  Octel  antiknock
compounds  which the Company  estimates will be sufficient to cover its needs in
any  contract  year.  Purchases  are at a fixed  price per pound  with  periodic
escalations and adjustments.

     In addition to the supply agreement, Octel and the Company have agreed that
Ethyl will  distribute  for Octel any of its lead antiknock  compounds that are
shipped in bulk in ocean-going vessels.

     The Company believes the agreements with Octel will assure the Company of
an ongoing  efficient  source of supply  for lead  antiknock  compounds  as the
worldwide demand for these products continues to decline. It does not anticipate
that the absence of antiknock  manufacturing  operations  and the entry into the
Octel supply  agreement will adversely  affect its relations with its customers,
nor  will  these  changes  have a  material  effect  on its  future  results  of
operations.  The Company and Octel  continue to compete  vigorously in sales and
marketing of lead antiknock compounds.

     The Company also sells manganese-based antiknock compounds, HiTEC 3000
performance  additive (MMT), which are used in leaded and conventional  unleaded
gasoline.  The compounds are  manufactured by Albemarle under a long-term supply
contract with Ethyl. MMT has been used in Canadian  unleaded gasoline for nearly
20 years.

     The following paragraphs summarize the events in the successful  completion
of the Company's 17-year effort to market this fuel additive in the U.S.

     The Company  conducted extensive testing of this product prior to filing a
request  in  1990  for  a fuel-additive  waiver  from  the  U.S.  Environmental
Protection  Agency  (EPA) which is  required  in order to begin  marketing  the
additive  for use in conventional  unleaded  gasoline  in the U.S.  The Company
voluntarily  withdrew its waiver  application  in  November  1990 after  public
hearings and detailed exchanges of information with the EPA, when the EPA raised
several health and environmental questions near the end of the 180-day statutory
review period. The Company  continued testing and filed a new waiver request in
July 1991, followed by  additional  public  hearings and detailed  exchanges of
information with the EPA.

     In January 1992, the EPA denied the Company's  application for a waiver. An
appeal was filed with the United  States  Court of Appeals  for the District of
Columbia Circuit contesting the EPA's denial of the application for a waiver for
the use of the additive in unleaded gasoline.  In April 1993, the Court remanded
the case to the EPA for  reconsideration  within  180 days of its denial of the
Company's  waiver  application,  directing  the EPA to consider new evidence and
make a new decision.

     On November 30, 1993, the EPA  determined that emissions data contained in
the Company's application satisfy all Clean Air Act standards, but reported that
it was not  able  to  complete  its  assessment of the  overall  public  health
implications of manganese. The Company and the EPA mutually agreed to an 180-day
extension,  subsequently  extended for an additional six weeks,  to resolve this
last remaining issue.

     In July  1994,  the EPA  refused  to grant  the  waiver  for the use of the
additive in  unleaded gasoline,  finding  that there was  insufficient  data to
alleviate its concerns about the overall public health implications of manganese
despite  their own previous  statements  about  favorable  health  effects.  The
Company  filed an appeal in July 1994,  with the United  States Court of Appeals
for the District of Columbia Circuit seeking relief from the EPA's actions.  The
Court heard oral arguments in Ethyl's appeal on January 13, 1995.

     On April 14, 1995, a three-judge  panel ruled  unanimously in Ethyl's favor
and ordered the EPA to grant the waiver for MMT. The Court's  opinion  noted the
Administrator  of the EPA "violated  the  clear  terms" of the Clean Air Act in
denying Ethyl's waiver application. The EPA granted the waiver on July 11, 1995.

     In a related matter,  a  different  three-judge  panel of the  District of
Columbia  Circuit heard oral arguments on September 11, 1995, in Ethyl's lawsuit
challenging  the EPA's  July 13,  1994,  determination  that the  Company  must
complete additional   manganese   health   testing  before  it  can  obtain  a
"registration"  under the Clean Air Act for sale of MMT as an unleaded  gasoline
fuel  additive.  On October 20, 1995, the Court  unanimously  ordered the EPA to
register MMT for use in unleaded  gasoline  retroactively to November 30,
1993-the date on which the EPA determined that Ethyl's waiver  application
satisfied all applicable Clean Air Act standards.  In addition, the Court
confirmed during the proceedings that if the EPA continues to have health
concerns with reference to the  product,  the Clean Air Act  provides  adequate
provisions  in which to address these issues.  This  decision  eliminated  the
last hurdle to commercial introduction of the product in the U.S.

     Accordingly,  in late  December  1995, Ethyl began sale of MMT to the U.S.
refining industry. It is not practical to determine with certainty the degree to
which  sales  of MMT  will  increase  in 1996 in the  U.S.,  as well as in other
countries.

     In May 1995,  Canada's Minister of  Environment  introduced  a bill in the
Canadian Parliament to ban the inter-provincial  transport of MMT.  Effectively,
passage  of Bill C-94 would ban the use of MMT in that  country.  The  Minister
reacted  to unsubstantiated  claims  made by the  Motor  Vehicle  Manufacturers
Association of Canada (MVMA) about MMT's  compatibility  with automobile exhaust
emission systems.  Ethyl  believes  the MVMA has made its  claims  without  the
support of  credible  studies  or test data.  The  Canadian  Petroleum  Products
Institute  supports Ethyl's view.  Substantial  opposition to Bill C-94 surfaced
during Canadian  Parliamentary sessions in 1995. When Parliament  adjourned in
mid-December 1995, Bill C-94 had not passed the House of Commons. On February 2,
1996, the Prime Minister took administrative actions in the first session of the
35th  Parliament,  causing all bills and motions  currently  before the House of
Commons and the Senate to automatically die, including Bill C-94.

     On February 15, 1996, the Environmental  Defense Fund (EDF)  initiated a
campaign,  using distortions and  half-truths,  to try to prevent refiners from
using MMT in the U.S.  The Company will  continue to  aggressively  defend MMT
against this or any similar campaign which attempts to handicap the marketing of
this product.

FINANCIAL CONDITION
AND LIQUIDITY

     Cash and cash  equivalents  at December 31,  1995,  were about $30 million,
which represents a decrease of about $1.2 million from $31.2 million at year-end
1994, which itself represented a decrease of $17 million from year-end 1993. The
large  decrease  in 1994  primarily  reflected  the  effect of the  spin-off  of
Albemarle at the close of business on February 28, 1994,  whereby  $29.3 million
in cash and cash equivalents was included as part of the spin-off.

     Cash flows from 1995 operating  activities of $149.3 million,  supplemented
by $1.2 million  from cash on hand,  were used  primarily  to provide  funds for
capital  expenditures  of $44.8 million,  to pay cash dividends to  shareholders
totaling $59.2 million and to reduce long-term debt by $47 million.

     Cash flows from 1994 operating activities of $122.2 million,  together with
$47.4  million in additional  long-term  debt and $60.5 million from the sale of
Whitby,  Inc., on September 15, 1994, were used to cover capital expenditures of
$147.3 million and cash dividends to shareholders  of $62.2 million,  as well as
partly replace the reduction of $29.3 million in cash and cash equivalents which
occurred as part of the spin-off of Albemarle.

     Management anticipates that cash  provided  from  operations  in the future
will be  sufficient to cover the Company's  operating  expenses,  service  debt
obligations  and  make  dividend payments to shareholders.

     Ethyl's  long-term  debt,  all of which  is  noncurrent,  amounted  to $303
million at December 31, 1995,  representing a reduction in long-term debt of $47
million from December 31, 1994. In September  1995,  the Company  refinanced its
$200 million 9.8% Notes with lower cost revolving debt. The Company's  long-term
debt as a percent  of  long-term  debt plus  shareholders'  equity  was 42.5% at
December 31, 1995, compared to 47.2% at December 31, 1994. The Company targets a
range of 30% to 50% for its long-term debt ratio.

     The Company's  capital spending program over each of the next three to five
years is expected to be somewhat higher than in 1995, but lower than in 1994 and
1993,  reflecting the completion of major  construction and expansion  programs.
Capital  spending for  environmental  and safety  projects  likely will increase
somewhat  from  current  levels,  except for the  portion of major  construction
projects that is identified as for environmental or safety purposes,  which also
will  reflect the decline in spending on major  projects.  The capital  spending
will be financed primarily with cash provided from operations.

     Ethyl's acquisition searches are primarily for petroleum additives
businesses  and are  normally  for cash,  and are funded  through  internal  and
external sources, including the use of existing credit lines and long-term debt.
On February 29, 1996,  the Company  completed the  acquisition  of the worldwide
lubricant  additives business of Texaco using existing credit lines. The Company
has filed a S-3 shelf  registration for up to $300 million of debt securities or
preferred stock.  The proceeds from occasional sales of businesses  normally are
used to repay long-term debt.

     The amount and timing of  additional  borrowing,  or issuance of stock will
depend on the  Company's  specific  cash  requirements.  See Note 10 of Notes to
Financial Statements on page 37 for information on unused lines of credit.

ENVIRONMENTAL MATTERS

     The Company is subject to federal, state and local requirements  regulating
the handling,  manufacture and use of materials (some of which may be classified
as  hazardous or toxic by one or more  regulatory  agencies),  the  discharge of
materials into the environment and the protection of the environment.  It is the
Company's  policy to comply with these  requirements  and to provide  workplaces
that are safe,  healthful and environmentally  sound for employees and that will
not adversely  affect the safety,  health or environment of communities in which
Ethyl  does  business.  The Company  believes  that as a general  matter  its
policies,  practices  and  procedures  are  properly  designed  to  prevent  any
unreasonable risk of environmental damage, and of resulting financial liability,
in connection with its business.

     To the best of the Company's knowledge,  Ethyl currently is complying with,
and expects to continue to comply in every  material  respect with, all existing
environmental laws,  regulations,  statutes and ordinances,  including the Clean
Air  Act   Amendment   of  1990,   even  though   compliance   with government
pollution-abatement and safety regulations usually increases operating costs and
requires remediation costs and investment of capital that in some cases produces
no monetary  return.  Such  compliance  with federal, state,  local and foreign
environmental  protection  laws has not in the past had,  and is not expected to
have in the future, a material effect upon the Company's financial position.

     Consolidated  environmental  operating  and  remediation  costs  charged to
expense  were  approximately  $20  million in 1995,  $31 million in 1994 and $61
million in 1993 (excluding depreciation of previous capital expenditures).

     On a pro forma basis,  operating and remediation  costs were  approximately
$24 million (which includes the $8 million environmental special charge) in 1994
and $13 million in 1993. Actual operating and remediation costs were $20 million
in 1995 and are  expected  to be somewhat  higher in the next few years than in
1995. The ongoing cost of operations  was about $14 million in 1995,  while 1994
and 1993  amounted to $11 million and $6 million,  respectively,  on a pro forma
basis, with the balance representing  remediation and monitoring costs incurred
or accrued.

     Consolidated  capital  expenditures  for  pollution  abatement  and  safety
projects,  including  such  costs  that are  included  in other  projects,  were
approximately  $4 million in 1995  versus $16 million in 1994 and $30 million in
1993.

     On a pro forma  basis,  such  expenditures  were $14 million in 1994 and $4
million in 1993. For each of the next few years,  capital expenditures for these
types of projects are likely to range from about $3-$5 million.

     Management's  estimates of the effects of  compliance  with governmental
pollution abatement and safety regulations are subject to (1) the possibility of
changes  in  the  applicable   statutes  and   regulations  or  in  judicial  or
administrative construction of such statutes and regulations, (2) uncertainty as
to whether  anticipated  solutions to pollution  problems  will be successful or
whether additional expenditures may prove necessary and (3) the possibility that
emerging  technology will change remediation  methods and reduce remediation and
monitoring costs.

     Among  other  environmental  requirements,  the  Company  is subject to the
federal  Superfund  law, and similar state laws,  under which the Company may be
designated  as a  Potentially  Responsible  Party  (PRP) and may be liable for a
share of the costs  associated  with cleaning up various  hazardous waste sites.
For sites where  Ethyl has been named a PRP,  in all but two cases,  the Company
has been able to  demonstrate  it is only a de minimis  participant  (defined as
actual or  estimated  cost  being  less  than  $50,000)  or a minor  participant
(defined as actual or estimated cost being less than $300,000).  Further, almost
all such sites, including the two largest,  represent  environmental issues that
are quite  mature.  They have been  investigated,  studied  and,  in many cases,
including the two largest,  the remediation  methodology  and the  proportionate
shares of each PRP have been established.  The financial  viability of the other
PRPs is reasonably  assured.  Therefore,  point  estimates for  remediation  and
monitoring costs had been accrued previously, and some or all of the remediation
has been completed.  At some sites where remediation is not complete,  including
one of the largest,  the remediation  and monitoring  probably will continue for
extended periods of time.

     In de minimis PRP matters and in some minor PRP  matters,  the  Company's
policy  generally is to negotiate a consent decree and to pay any apportioned
settlement, enabling the Company to be effectively  relieved  of any  further
liability  as a PRP,  except  for remote contingencies.

     In PRP matters other than those that are de minimis or minor, the Company's
records indicate that unresolved  exposures are not material  individually or in
the aggregate to Ethyl's financial position or results of operations.

     The  Company  reviews  the  status of  significant  existing  or  potential
environmental   issues,   including  PRP  matters,   accrues  and  expenses  its
proportionate  share  of  environmental  remediation  and  monitoring  costs  in
accordance with FASB Statement No. 5 and FASB Interpretation No. 14, and adjusts
reserves,  as  appropriate,  on the basis of additional  information.  The total
gross  liabilities  accrued at December  31, 1995 and 1994,  were  approximately
$41.6  million  and  $38.4  million,  respectively,  with  insurance  recoveries
expected for a significant portion of the amounts. In addition,  the Company has
contingent liabilities for environmental  remediation costs associated with past
operations.  Management expects accrued and contingent amounts may be reduced as
emerging  technologies  are proved to be viable.  The Company  believes that the
cost of remediation of current sites,  which will occur over an extended  period
of time, will not have a material adverse impact on its  consolidated  financial
position but possibly could have a material effect when ultimately resolved,  on
results of operations or liquidity in any quarterly or annual period.

INTRODUCTION TO GEOGRAPHIC  AREAS:  The following table includes the results and
accounts  of the  businesses  spun  off as  Albemarle  Corporation  through  the
spin-off date at the close of business on February 28, 1994.

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------
GEOGRAPHIC AREAS:
(In Thousands)
---------------------------------------------------------------------------------------------------------------------------
							   1995          1994          1993          1992           1991
---------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>           <C>           <C>           <C>
Net sales:
   Domestic unaffiliated:
      United States                                     $  361,751    $  502,427    $  969,438    $  829,432    $  712,826
      Export                                               178,485       217,067       338,944       352,596       323,564
   Transfers to foreign affiliates                         221,159       210,884       258,966       270,887       331,751
   Foreign unaffiliated                                    420,214       454,592       630,008       510,554       498,181
   Elimination of transfers                             $ (221,159)     (210,884)     (258,966)     (270,887)     (331,751)
---------------------------------------------------------------------------------------------------------------------------
      Total                                             $  960,450    $1,174,086    $1,938,390    $1,692,582    $1,534,571
===========================================================================================================================
Operating profit:(a) (b)  (c) (d)  (e)
   Domestic                                             $  134,123    $  149,847    $  161,590    $  174,870    $  178,776
   Foreign                                                  31,947        44,828        42,392        35,068        52,058
---------------------------------------------------------------------------------------------------------------------------
      Subtotal                                             166,070       194,675       203,982       209,938       230,834
   Unallocated expenses                                    (23,641)      (26,933)      (36,377)      (36,116)      (38,169)
---------------------------------------------------------------------------------------------------------------------------
      Operating profit                                     142,429       167,742       167,605       173,822       192,665

Interest and financing expenses                            (26,833)      (25,378)      (44,085)      (62,279)      (59,097)
Gain on sale of 20% of First Colony Corporation                  -             -             -        93,600             -
Other income (expenses), net                                   580        (1,218)        9,987         1,475         1,652
---------------------------------------------------------------------------------------------------------------------------
Income before income taxes, extraordinary item,
   cumulative effect of accounting changes and
   discontinued insurance operations                    $  116,176    $  141,146    $  133,507    $  206,618    $  135,220
===========================================================================================================================
Identifiable assets:
   Domestic                                             $  601,854    $  642,814    $1,250,650    $1,155,860    $  975,415
   Foreign                                                 264,973       265,506       628,830       517,390       484,498
   Non-operating assets                                    116,960       122,095       129,718       205,648       110,592
   Net assets of discontinued insurance operations               -             -             -       658,550       909,876
---------------------------------------------------------------------------------------------------------------------------
      Total                                             $  983,787    $1,030,415    $2,009,198    $2,537,448    $2,480,381
===========================================================================================================================

</TABLE>

Refer to notes on page 26.

GEOGRAPHIC

     Domestic operating profit includes profit from U.S. export sales and profit
from sales to foreign affiliates of products that are resold in foreign markets.
Intercompany transfers from foreign areas to the United States are not material.
Transfers  between  geographic  areas are made at  prices  intended  to  reflect
arm's-length pricing.

     Net unaffiliated  sales of foreign  subsidiaries for 1995 decreased 8% from
1994, primarily reflecting inclusion of two months of Albemarle's sales in 1994.
Net unaffiliated sales of foreign subsidiaries for 1994 decreased 28% from 1993,
also  primarily  reflecting the inclusion of  Albemarle's  foreign  unaffiliated
sales for two months in 1994 versus 12 months in 1993.

     Net  unaffiliated  sales of foreign  subsidiaries of $420.2 million in 1995
were  about 2%  higher  than pro  forma  sales of $413.4  million  in 1994.  The
increase  was due to higher  shipments  of  lubricant  additives  from  European
subsidiaries to Europe and the Middle East, largely offset by lower shipments of
lead antiknocks from Ethyl's Canadian  subsidiary,  following the discontinuance
of lead antiknock  production at the Canadian lead  antiknock  facility in early
1994. On a pro forma basis,  net unaffiliated  sales of foreign  subsidiaries in
1994 would have been down about 2% from some $422.7 million in 1993. Most of the
decrease was due to lower lead antiknock  sales by Ethyl's  Canadian  subsidiary
and slightly lower sales of lubricant and fuel additives in the Far East.

     Export sales  decreased  18% in 1995 from 1994,  primarily  reflecting  the
inclusion of two months of  Albemarle's  export sales in 1994,  as well as lower
petroleum  additives  sales.  Export  sales  decreased  36% in 1994  from  1993,
primarily  reflecting  the  inclusion of only two months of  Albemarle's  export
sales in 1994 versus 12 months of export sales in 1993.

     Export sales of $178.5  million in 1995  decreased 7% from pro forma export
sales of $191.5  million in 1994,  due to lower  shipments of lubricant and fuel
additives, primarily to the Far East. On a pro forma basis, export sales in 1994
were down about 2% from $194.4  million in 1993 due to lower  shipments  of lead
antiknocks  and lubricant and fuel  additives to the Far East,  partly offset by
increased antiknock shipments to Latin America.

     Foreign operating profit for 1995 decreased 29% from 1994, reflecting lower
operating profit from Ethyl's Canadian  subsidiary  following the discontinuance
of lead antiknock  production and lower operating  profit from Ethyl's  European
subsidiaries, mainly due to lower operating margins. These were partially offset
by the  inclusion  of two  months of  operating  losses of  Albemarle's  foreign
subsidiaries in 1994.  Foreign operating profit for 1994 increased 6% from 1993,
reflecting  primarily the effect of the spin-off,  whereby  Albemarle's  foreign
subsidiaries'  operating  losses are  included  only for the first two months of
1994 versus the  inclusion  of 12 months of operating  losses for 1993,  and the
1993 special charge of $14.2 million related to the discontinuance of production
at Ethyl's Canadian  subsidiary's lead antiknock  facility,  partially offset by
lower operating profit in 1994 following the discontinuance.

     Foreign  operating profit in 1995 of $31.9 million was about 32% lower than
pro forma foreign  operating  profit of $47.2 million in 1994. The reduction was
due to lower operating profit from Ethyl's  Canadian and European  subsidiaries,
mainly due to lower margins.  On a pro forma basis,  foreign operating profit in
1994 was down about 19% from  approximately  $58.1  million in 1993,  because of
lower lead  antiknock  sales by the  Company's  Canadian  subsidiary,  partially
offset by the charge for write-down of the facility in 1993.

     Total assets were $983.8 million at the end of 1995 which was a decrease of
$46.6  million (5%) from the $1,030.4 million at the end of 1994.  About $43
million of the  decrease was due to lower current assets in the U.S.,
reflecting lower accounts  receivable partly offset by higher inventory.

     Total assets were $1,030.4 million at the end of 1994, a decrease of $978.8
million  from  $2,009.2  million at the end of 1993,  primarily  reflecting  the
effect of the spin-off of Albemarle.

INTRODUCTION   TO  SELECTED   QUARTERLY   CONSOLIDATED   FINANCIAL   DATA:   The
first-quarter  1994 information  includes the results of the businesses spun off
as Albemarle Corporation at the close of business on February 28, 1994.

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------
SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA
(In Thousands Except Earnings Per Share) (Unaudited)
---------------------------------------------------------------------------------------------------------

						    First         Second          Third         Fourth
1995                                               Quarter        Quarter        Quarter        Quarter
---------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>            <C>            <C>
Net sales                                         $234,291       $224,530       $241,672       $259,957
Gross profit                                      $ 82,179       $ 70,599       $ 81,918       $ 89,698
Special charge (a)                                $      -       $      -       $  4,750       $      -
Net income                                        $ 21,493       $ 13,006       $ 16,967       $ 22,497
Earnings per share                                $    .18       $    .11       $    .14       $    .19
Shares used to compute earnings per share          118,438        118,443        118,442        118,460

1994
---------------------------------------------------------------------------------------------------------
Net sales                                         $389,082       $276,083       $244,935       $263,986
Gross profit                                      $115,541       $107,763       $ 86,856       $ 87,418
Special charges (b)                               $    638       $  1,332       $      -       $    750
Net income                                        $ 20,264       $ 30,378       $ 22,494       $ 24,619
Earnings per share                                $    .17       $    .26       $    .19       $    .21
Shares used to compute earnings per share          118,462        118,454        118,448        118,441
---------------------------------------------------------------------------------------------------------
</TABLE>

NOTES TO FINANCIAL TABLES

(a) Operating  profit for 1995  includes a net charge of $4,750  ($4,150  after
    income taxes) for a legal  settlement  provision.

(b) Operating profit for 1994 includes  a net  charge  of $2,720  ($1,690  after
    income  taxes)  including  a fourth-quarter  environmental remediation
    provision of $8,000 as well as certain other charges  largely offset by an
    $8,000 benefit from a  fourth-quarter  legal settlement.

(c) Operating  profit for 1993 includes  special charges  totalling $36,150
    ($22,400 after income taxes) for the write-down of the Canadian subsidiary's
    plant   and   other   costs   of   $14,200,    costs   of   a
    work-force-reduction  program  in the U.S.  and Europe  amounting  to $7,635
    and $14,315  for  downsizing  costs of Whitby  Research,  Inc.,  and
    relocation  of employees and other  related  costs.

(d) Operating  profit for 1992 includes a special charge of $9,500  ($6,000
    after income taxes) for expenses  covering the 1994  relocation  of
    Petroleum  Additives  Division  research  and  development personnel from
    St. Louis, Missouri, to Richmond,  Virginia.

(e) Operating profit for 1991  includes  special  charges of $4,835  ($3,000
    after income taxes) for expenses  covering  the 1992  relocation  of the
    Petroleum  Additives  Division headquarters  to Richmond,  and $6,350
    ($4,000 after income taxes) for expenses and  write-offs  resulting from the
    discontinuance of certain  developmental research programs.

<TABLE>
<CAPTION>

HOW ETHYL USED THE REVENUES IT RECEIVED (1994 EXCLUDES SPUN-OFF OPERATIONS)

     [PIE CHARTS SHOWING PERCENTAGES FOR 1995 AND 1994 WERE PART OF TABLE]

------------------------------------------------------------------------------------------
(In Millions) (Unaudited)
						    1995                     1994
					     ---------------------------------------------
<S>                                           <C>          <C>         <C>         <C>
[]  Materials, services, etc.                 $629.8        65.5%      $  682.5     67.1%

[]  Payrolls & employee benefits               119.2        12.4          119.6     11.8

[]  Dividends declared                          59.2         6.2           59.2      5.8

[]  Current income & other taxes                41.6         4.3           41.6      4.1

[]  Interest expense                            26.8         2.8           22.5      2.2

[]  For use in the business including
    expansion & modernization                   84.4         8.8           91.9      9.0
------------------------------------------------------------------------------------------
    Total revenues                            $961.0       100.0%      $1,017.3    100.0%
==========================================================================================
</TABLE>


DIVIDEND INFORMATION & EQUITY
PER COMMON SHARE

   Ethyl's current  quarterly  common stock dividend rate of $.125 per share, or
$.50 on an annual basis,  reflects the March 3, 1994 adjustment by the Company's
board of directors of the prior common stock dividend rate to reflect the effect
of the dividend to be paid by Albemarle  Corporation,  which was spun-off at the
close of business on February  28,  1994.  The  combination  of Ethyl's  current
quarterly  dividend  rate of $.125 per share or $.50 on an annual  basis and the
Albemarle dividend,  established at the time of the spin-off,  equals the annual
dividend rate prior to the spin-off.

   Equity per common share at December 31, 1995, was $3.46. This reflects an
increase of about 5% from $3.30 at December 31, 1994.

MARKET PRICES OF COMMON STOCK
& SHAREHOLDER DATA

   The Company's common stock is traded primarily on the New York Stock Exchange
under the symbol EY. The reported  high and low prices by quarters for the years
1995 and 1994 are shown in the following table.

				  1995              1994
----------------------------------------------------------------------
			      High      Low       High     Low
----------------------------------------------------------------------
First Quarter                11         9 1/2     19 5/8   11 1/8
Second Quarter               12 3/8    10 1/4     13 3/4   11
Third Quarter                11 13/16  10 5/8     13 5/8   10 3/4
Fourth Quarter               13 1/8    10 7/8     11 3/4    9 1/2
----------------------------------------------------------------------

   The  first-quarter  1994  common-stock-price  high  was  reached  before  the
spin-off of Ethyl's wholly owned subsidiary, Albemarle Corporation, at the close
of business on February 28, 1994.  Shareholders  of record on that date received
one share of  Albemarle  common stock for every two shares of Ethyl common stock
held.  There  were  118,414,769  shares of Ethyl  common  stock  outstanding  on
February 28, 1994, the distribution date.

   There were 118,443,835 shares of common stock held by 13,079  shareholders of
record as of December 31, 1995.



			  CONSOLIDATED BALANCE SHEETS

INTRODUCTION TO THE CONSOLIDATED FINANCIAL STATEMENTS:  At the close of business
on February 28,  1994,  the Company  completed  the spin-off of its wholly owned
subsidiary,  Albemarle  Corporation.  The  operating  results  of  what  is  now
Albemarle are included in the  Consolidated  Statements of Income,  Consolidated
Statements of Shareholders' Equity and Consolidated Statements of Cash Flows for
the two months ended  February 28, 1994,  and the full year 1993. The Company is
including  certain pro forma  financial  statements to illustrate  the Company's
prior year's estimated  financial  results excluding the operations and accounts
of the businesses spun off (see Note 2 beginning on page 34).

------------------------------------------------------------------------------
(In Thousands of Dollars Except Share Data)
------------------------------------------------------------------------------
December 31                                              1995          1994
------------------------------------------------------------------------------
ASSETS
Current assets:
   Cash and cash equivalents                          $   29,972    $   31,166


   Accounts receivable, less allowance for doubtful
      accounts (1995 - $2,317; 1994 - $2,395)            169,451       229,477

   Inventories:
      Finished goods                                     134,087       118,731
      Work-in-process                                     11,923         9,959
      Raw materials                                       13,285        10,842
      Stores, supplies and other                           6,587         5,531
------------------------------------------------------------------------------
							 165,882       145,063

    Deferred income taxes and prepaid expenses            23,207        25,744
------------------------------------------------------------------------------
      Total current assets                               388,512       431,450
------------------------------------------------------------------------------

Property, plant and equipment, at cost                   713,635       684,379
    Less accumulated depreciation and amortization      (285,327)     (250,012)
------------------------------------------------------------------------------

      Net property, plant and equipment                  428,308       434,367
------------------------------------------------------------------------------


Other assets and deferred charges                        151,833       144,856

Goodwill and other intangibles - net of amortization      15,134        19,742
------------------------------------------------------------------------------

TOTAL ASSETS                                          $  983,787    $1,030,415
==============================================================================

		See accompanying notes to financial statements.



					     Ethyl Corporation & Subsidiaries

-----------------------------------------------------------------------------
December 31                                             1995          1994
-----------------------------------------------------------------------------
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                    $ 55,903    $   77,223
   Accrued expenses                                      58,682        73,118
   Dividends payable                                     14,806        14,807
   Income taxes payable                                  16,379        17,652
-----------------------------------------------------------------------------
	 Total current liabilities                      145,770       182,800
-----------------------------------------------------------------------------


Long-term debt                                          302,973       349,766


Other noncurrent liabilities                             84,171        78,902


Deferred income taxes                                    40,745        28,010


Shareholders'  equity:
   Common stock ($1 par value)
      Issued - 118,443,835 in 1995 and
      118,434,401 in 1994                               118,444       118,434
   Additional paid-in capital                             2,799         2,706
   Foreign currency translation adjustments               2,090        (2,253)
   Retained earnings                                    286,795       272,050
-----------------------------------------------------------------------------
							410,128       390,937
-----------------------------------------------------------------------------

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY               $983,787    $1,030,415

=============================================================================


		See accompanying notes to financial statements.




<TABLE>
<CAPTION>

					     CONSOLIDATED STATEMENTS OF INCOME

(In Thousands of Dollars Except Per-Share Amounts)                                        Ethyl Corporation & Subsidiaries
---------------------------------------------------------------------------------------------------------------------------
Years ended December 31                                                              1995           1994            1993
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>           <C>            <C>
Net sales                                                                          $960,450      $1,174,086     $1,938,390
Cost of goods sold                                                                  636,056         776,508      1,386,251
---------------------------------------------------------------------------------------------------------------------------
   Gross profit                                                                     324,394         397,578        552,139

Selling, general and administrative expenses                                        100,062         144,455        221,384
Research, development and testing expenses                                           77,153          82,661        127,000
Special charges                                                                       4,750           2,720         36,150
---------------------------------------------------------------------------------------------------------------------------
      Operating profit                                                              142,429         167,742        167,605

Interest and financing expenses                                                      26,833          25,378         44,085
Other (income) expenses, net                                                           (580)          1,218         (9,987)
---------------------------------------------------------------------------------------------------------------------------

Income before income taxes, extraordinary item
   and discontinued insurance operations                                            116,176         141,146        133,507
Income taxes                                                                         42,213          43,391         43,485
---------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item
   and discontinued insurance operations                                             73,963          97,755         90,022

Extraordinary after-tax charge due to early extinguishment of debt                        -               -         (5,000)
---------------------------------------------------------------------------------------------------------------------------
Income before  discontinued insurance operations                                     73,963          97,755         85,022

Income from discontinued insurance operations                                             -               -         90,483
---------------------------------------------------------------------------------------------------------------------------
Net income                                                                         $ 73,963      $   97,755     $  175,505
===========================================================================================================================

Earnings per share:
   Income before extraordinary item and discontinued insurance operations          $    .62      $      .83     $      .76
   Extraordinary item                                                                     -               -           (.04)
---------------------------------------------------------------------------------------------------------------------------

   Income before discontinued insurance operations                                      .62             .83            .72
   Income from discontinued insurance operations                                          -               -            .76
---------------------------------------------------------------------------------------------------------------------------
   Net income                                                                      $    .62      $      .83     $     1.48
===========================================================================================================================

</TABLE>


		See accompanying notes to financial statements.





<TABLE>
<CAPTION>

				 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In Thousands of Dollars Except Share Data)                                                Ethyl Corporation & Subsidiaries
---------------------------------------------------------------------------------------------------------------------------
Years Ended December 31                                    1995                      1994                    1993
---------------------------------------------------------------------------------------------------------------------------
						   Shares        Amounts      Shares      Amounts      Shares      Amounts
---------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>       <C>            <C>       <C>           <C>
COMMON STOCK
(AUTHORIZED 400,000,000 SHARES)
   Beginning balance                              118,434,401    $118,434  118,405,287   $ 118,405  118,357,515 $  118,358
   Issued upon exercise of stock options
      and SARs                                          9,434          10       75,723          76       75,714         75
   Purchased and retired                                    -           -      (46,609)        (47)     (27,942)       (28)
---------------------------------------------------------------------------------------------------------------------------
   Ending balance                                 118,443,835     118,444  118,434,401     118,434  118,405,287    118,405
===========================================================================================================================
ADDITIONAL PAID-IN CAPITAL
   Beginning balance                                                2,706                    2,450                   1,708
   Exercise of stock options and SARs                                  93                      858                   1,374
   Retirement of purchased common stock                                 -                     (602)                   (621)
   Distribution of common stock under bonus plan                        -                        -                     (11)
---------------------------------------------------------------------------------------------------------------------------
   Ending balance                                                   2,799                    2,706                   2,450
---------------------------------------------------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
   Beginning balance                                               (2,253)                  (1,757)                  9,840
   Translation adjustments                                          4,343                    3,647                 (11,597)
   Spin-off of Albemarle Corporation                                    -                   (4,143)                      -
---------------------------------------------------------------------------------------------------------------------------
   Ending balance                                                   2,090                   (2,253)                 (1,757)
----------------------------------------------------------------------------------------------------------------------------
UNREALIZED GAIN ON MARKETABLE EQUITY SECURITIES
   Beginning balance                                                    -                        -                  64,901
   Unrealized gains                                                     -                        -                  13,326
   Spin-off of First Colony Corporation                                 -                        -                 (78,227)
---------------------------------------------------------------------------------------------------------------------------
   Ending balance                                                       -                        -                       -
----------------------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
   Beginning balance                                              272,050                  633,483               1,206,472
   Net income                                                      73,963                   97,755                 175,505
   Cash dividends declared:
      First Preferred stock, $6.00 per share                            -                      (12)                    (12)
      Common stock, $.50 per share in 1995 and 1994
	 and $.60 per share in 1993                               (59,218)                 (59,215)                (71,033)
   Dividend of common stock of Albemarle Corporation,
      at book value                                                     -                 (399,957)                      -
   Dividend of common stock of First Colony Corporation,
      at book value                                                     -                        -                (677,449)
   Redemption of 6% First Preferred stock                               -                       (4)                      -
---------------------------------------------------------------------------------------------------------------------------
   Ending balance                                                 286,795                  272,050                 633,483

TOTAL SHAREHOLDERS' EQUITY                                       $410,128                $ 390,937              $  752,581
===========================================================================================================================

</TABLE>

		See accompanying notes to financial statements.



<TABLE>
<CAPTION>

				       CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of Dollars)                                                                  Ethyl Corporation & Subsidiaries
---------------------------------------------------------------------------------------------------------------------------

Years ended December 31                                                                  1995          1994         1993
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>            <C>            <C>
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                      $    31,166    $   48,201     $ 162,988
---------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (earnings before discontinued insurance operations in 1993)                73,963        97,755        85,022
   Adjustments to reconcile income to cash flows from operating activities:
      Depreciation and amortization                                                      49,224        53,983       127,456
      Special charges                                                                     4,750        10,720        36,150
      Gain on sale of subsidiary                                                              -        (4,150)       (6,121)
      Deferred income taxes                                                              15,714        10,262        (7,663)
      Changes in assets and liabilities, net of effects from acquisitions:
	 Decrease (increase) in accounts receivable                                      64,771       (29,701)      (16,268)
	 (Increase) decrease in inventories                                             (15,560)        9,166          (918)
	 (Increase) in prepaid expenses                                                  (2,366)       (5,516)         (999)
	 (Decrease) in accounts payable and accrued expenses                            (37,948)       (2,621)      (13,686)
	 (Decrease) in income taxes payable                                              (1,208)       (6,903)       (2,454)
	 Income-tax payment on 1992 gain on sale of 20% of First Colony Corporation           -             -       (60,552)
      Other, net                                                                         (2,003)      (10,775)          166
---------------------------------------------------------------------------------------------------------------------------
	    Cash provided from operating activities
	       (before discontinued insurance operations in 1993)                       149,337       122,220       140,133
---------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                                 (44,831)     (147,260)     (205,029)
   Acquisitions of businesses (net of $5,369 cash acquired in 1993)                           -             -      (125,431)
   Proceeds from sale of subsidiary                                                           -        60,500        10,000
   Other, net                                                                               217        (8,234)          537
---------------------------------------------------------------------------------------------------------------------------
      Cash (used in) investing activities
	 (before discontinued insurance operations in 1993)                             (44,614)      (94,994)     (319,923)
---------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Additional long-term debt                                                            153,000        47,400       360,448
   Repayment of long-term debt                                                         (200,000)            -      (230,355)
   Cash dividends paid                                                                  (59,220)      (62,184)      (71,037)
   Cash and cash equivalents of Albemarle spun off as a dividend on February 28, 1994         -       (29,332)            -
   Repurchases of capital stock                                                               -          (649)         (649)
   Other, net                                                                               303           504         1,448
---------------------------------------------------------------------------------------------------------------------------
      Cash (used in) provided from financing activities
	 (before discontinued insurance operations in 1993)                            (105,917)      (44,261)       59,855
---------------------------------------------------------------------------------------------------------------------------


Net cash used in operations (before discontinued insurance operations in 1993)           (1,194)      (17,035)     (119,935)

Cash provided by discontinued insurance operations                                            -             -         5,148
---------------------------------------------------------------------------------------------------------------------------

(Decrease) in cash and cash equivalents                                                  (1,194)      (17,035)     (114,787)

CASH AND CASH EQUIVALENTS AT END OF YEAR                                            $    29,972    $   31,166     $  48,201
===========================================================================================================================

</TABLE>


		See accompanying notes to financial statements.


			 NOTES TO FINANCIAL STATEMENTS

			 Ethyl Corporation & Subsidiaries

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------------------------------------------------------

   CONSOLIDATION - The consolidated  financial  statements  include the accounts
and operations of Ethyl  Corporation and all of its subsidiaries  (the Company).
All  significant  intercompany  accounts  and  transactions  are  eliminated  in
consolidation.

   BASIS OF PRESENTATION - At the close of business on February 28, 1994,  the
Company  completed  the  spin-off  of its  wholly  owned  subsidiary,  Albemarle
Corporation  (Albemarle),  in the form of a  tax-free  stock  dividend  to Ethyl
common shareholders. The operating results of what is now Albemarle are included
in  the   Consolidated   Statements  of  Income,   Consolidated   Statements  of
Shareholders'  Equity and the Consolidated  Statements of Cash Flows and related
notes to financial  statements  for the two months ended  February 28, 1994, and
the full year 1993.

   On July 1, 1993,  the Company  completed the spin-off of its then  80-percent
interest  in First  Colony  Corporation  (First  Colony) in the form of tax-free
stock dividend to Ethyl common  shareholders.  The Company has accounted for the
financial  results  of First  Colony  prior to the  spin-off  as a  discontinued
insurance operation in accordance with Accounting Principles Board (APB) Opinion
No. 30.

   FOREIGN CURRENCY TRANSLATION - The financial statements of all foreign
subsidiaries  were prepared in their respective local currencies and translated
into U.S.  dollars based on the current  exchange rate at the end of the period
for the balance sheet and a  weighted-average  rate for the period on the
statement of income.  Translation adjustments (net of deferred income tax
benefits  of  $262,000,  $1,481,000  and  $1,164,000  in 1995,  1994  and  1993,
respectively),  are reflected as foreign  currency  translation  adjustments  in
Shareholders'  Equity and accordingly have no effect on net income.  Transaction
adjustments for all foreign subsidiaries are included in income.

   INVENTORIES  -  Inventories  are stated at the lower of cost or market,  with
cost determined on the last-in,  first-out  (LIFO) basis for  substantially  all
domestic  inventories,  and on either  the  weighted-average  cost or  first-in,
first-out basis for other inventories. Cost elements included in work-in-process
and finished-goods inventories are raw materials, direct labor and manufacturing
overhead. Raw materials include purchase and delivery costs. Stores and supplies
include purchase costs.

   PROPERTY, PLANT & EQUIPMENT - Accounts include costs of assets constructed or
purchased,  related  delivery and  installation  costs and interest  incurred on
significant capital projects during their construction periods. Expenditures for
renewals and betterments also are capitalized,  but expenditures for repairs and
maintenance  are expensed as  incurred.  The cost and  accumulated  depreciation
applicable to assets retired or sold are removed from the  respective  accounts,
and gains or losses  therein are  included in income.  Depreciation  is computed
primarily by the straight-line method based on the estimated useful lives of the
assets.

   The Company re-evaluates  property,  plant and equipment based on fair values
or  undiscounted  operating  cash flows whenever  significant  events or changes
occur which might impair recovery of recorded costs, and it writes down recorded
costs of the assets to fair value when recorded costs, prior to impairment,  are
higher.

   ENVIRONMENTAL COMPLIANCE & REMEDIATION  -  Environmental  compliance  costs
include the costs of purchasing and/or constructing assets to prevent, limit and
control pollution or to monitor the environmental status at various locations.
These costs are  capitalized and  depreciated  based on estimated  useful lives.

   Environmental  compliance costs also include  maintenance and operating costs
with respect to pollution-prevention-and-control facilities and administrative
costs. Such operating costs are expensed as incurred.

   Environmental remediation costs of facilities used in current operations are
generally immaterial and are expensed as incurred.    Remediation    costs   and
post-remediation    costs   including post-remediation monitoring costs at
facilities or off-plant disposal sites that relate to an existing  condition
caused primarily by past operations are accrued as liabilities and expensed when
costs can be reasonably estimated.

   GOODWILL & OTHER  INTANGIBLES - Goodwill  acquired  prior to November 1, 1970
($1,652,000) is not being amortized.  Goodwill acquired subsequently ($8,500,000
and $9,815,000 at December 31, 1995 and 1994,  respectively,  net of accumulated
amortization) is being amortized on a straight-line  basis,  over a period of 10
years.  Other  intangibles  ($4,982,000  and $8,275,000 at December 31, 1995 and
1994,  respectively,  net of accumulated  amortization) are being amortized on a
straight-line   basis   primarily  over  periods  from  three  to  seven  years.
Amortization of goodwill and other intangibles  amounted to $4,504,000 for 1995,
$9,379,000  for 1994 and  $14,464,000  for  1993.  Accumulated  amortization  of
goodwill and other  intangibles  was  $17,760,000  and $13,256,000 at the end of
1995 and 1994, respectively.

   The Company re-evaluates  goodwill and other intangibles based on fair values
or  undiscounted  operating  cash flows whenever  significant  events or changes
occur which might impair recovery of recorded costs, and it writes down recorded
costs of the assets to fair value when recorded costs, prior to impairment,  are
higher.



			 NOTES TO FINANCIAL STATEMENTS

   PENSION PLANS & OTHER POSTEMPLOYMENT BENEFITS - Annual costs of pension plans
are determined  actuarially based on Financial Accounting Standards Board (FASB)
Statement  No.  87,  "Employers'  Accounting  for  Pensions."  The policy of the
Company is to fund its U.S.  pension  plans at amounts not less than the minimum
requirements  of the Employee  Retirement  Income  Security Act of 1974.  Annual
costs of other  postretirement  plans are accounted for based on FASB  Statement
No.  106,  "Employers'   Accounting  for  Postretirement   Benefits  Other  Than
Pensions."  The  policy  of the  Company  is to fund its  postretirement  health
benefits  for  retirees  on  a  pay-as-you-go   basis.  Annual  costs  of  other
postemployment  plans for employees who leave the Company for reasons other than
retirement are immaterial and are accounted for based on FASB Statement No. 112,
"Employers' Accounting for Postemployment  Benefits." The Company's policy is to
fund such benefits on a pay-as-you-go basis.

   PROFIT SHARING & EMPLOYEE SAVINGS PLAN - The Company's employees  participate
in the Ethyl-defined  contribution  401(k)  profit-sharing  and employee savings
plan,  which is  generally  available  to all  full-time  and  non-union  hourly
employees.  Certain  other  employees  are  covered by a  collective  bargaining
agreement  pursuant  to the terms of such  agreement.  The plans are funded with
contributions by participants and the Company.  Expenses recorded for the 401(k)
plans  in 1995,  1994  and 1993  were  $2,352,000,  $2,879,000  and  $7,478,000,
respectively.

   RESEARCH, DEVELOPMENT & TESTING EXPENSES  -  Company-sponsored  research,
development  and testing  expenses  related to present and future  products  are
expensed currently as incurred.  Research and development expenses determined in
accordance  with FASB Statement No. 2,  "Accounting for Research and Development
Costs," were $54.5  million,  $49.7 million and $75.6 million in 1995,  1994 and
1993, respectively.

   INCOME TAXES - Income taxes are  determined  based on FASB Statement No. 109,
"Accounting  for  Income  Taxes."   Deferred  tax  liabilities  and  assets  are
recognized  for the expected  future tax  consequences  of events that have been
included in the financial  statements or tax returns.  Deferred tax  liabilities
and assets are  determined  based on  differences  between  financial  statement
carrying amounts and tax bases of assets and liabilities using enacted tax rates
in effect in the years in which the differences are expected to reverse.

   DERIVATIVE INSTRUMENTS & HEDGING OF FOREIGN CURRENCY EXPOSURES  -  The
Company's current policy is not to make use of derivative financial  instruments
but rather to manage foreign currency  exposure by attempting to maintain assets
and liabilities in approximate  balance for each of the major foreign currencies
to which the Company has risk  exposure.  At December 31, 1995,  the Company was
not a party to any derivative financial instruments.

   EARNINGS  PER  SHARE  -  Earnings  per  share  is  computed  after  deducting
applicable   preferred   stock   dividends   from  net   income  and  using  the
weighted-average  number of shares of common stock and common stock  equivalents
outstanding  during the year.  The numbers of shares used in computing  earnings
per share were 118,446,000 in 1995, 118,451,000 in 1994 and 118,436,000 in 1993.


2. SPIN-OFF OF ALBEMARLE CORPORATION:
--------------------------------------------------------------------------------

   At the close of business on February 28, 1994,  Ethyl  completed the spin-off
of its wholly  owned  subsidiary,  Albemarle,  in the form of a  tax-free  stock
dividend.  Following the spin-off,  Albemarle owned, directly or indirectly, the
olefins and derivatives,  bromine chemicals and specialty  chemicals  businesses
formerly  owned  directly or indirectly  by the Company.  One share of Albemarle
common stock was distributed to Ethyl common  shareholders  for every two shares
of Ethyl common stock held.

SUPPLEMENTAL PRO FORMA CONDENSED STATEMENTS OF INCOME  (UNAUDITED) - As a result
of the aforementioned distribution, the Company believes that the following  pro
forma Condensed Statements of Income are important to enable the reader to
obtain a meaningful understanding of the Company's prior year's results of
operations. The pro forma Condensed Statements of Income are for informational
purposes only to illustrate the estimated effects of the distribution of
Albemarle on Ethyl on a stand-alone  basis and may not necessarily  reflect what
the earnings or results of operations  of Ethyl would have been had  Albemarle
operated as a separate, independent company.

<TABLE>
<CAPTION>


PRO FORMA CONDENSED STATEMENTS OF INCOME (UNAUDITED)
----------------------------------------------------------------------------------------------------------------------------------
(In Thousands Except Per-Share Amounts)
----------------------------------------------------------------------------------------------------------------------------------
								      1994                               1993
										   Pro                                   Pro
Years Ended December 31                                Historical  Adjustments(a)  Forma      Historical Adjustments(a)  Forma
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>          <C>         <C>          <C>          <C>        <C>
Net sales                                             $1,174,086   $(155,064)  $1,019,022   $1,938,390   $(903,418) $1,034,972
Cost of goods sold                                       776,508    (119,086)     657,422    1,386,251    (710,970)    675,281
----------------------------------------------------------------------------------------------------------------------------------
Gross profit                                             397,578     (35,978)     361,600      552,139    (192,448)    359,691
Selling, general & administrative expenses               144,455     (14,471)     129,984      221,384     (85,470)    135,914
Research, development & testing expenses                  82,661      (8,662)      73,999      127,000     (50,994)     76,006
Special charges                                            2,720           -        2,720       36,150      (7,322)     28,828
----------------------------------------------------------------------------------------------------------------------------------
Operating profit                                         167,742     (12,845)     154,897      167,605     (48,662)    118,943
Interest & financing expenses                             25,378      (2,873)(b)   22,505       44,085     (17,358)(b)  26,727
Other expenses (income), net                               1,218         543        1,761       (9,987)      1,640      (8,347)
---------------------------------------------------------------------------------------------------------------------------------
Income before  income taxes, extraordinary item and
   discontinued insurance operations                     141,146     (10,515)     130,631      133,507     (32,944)    100,563
Income taxes                                              43,391      (4,239)(c)   39,152       43,485     (17,098)(c)  26,387
----------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item and
   discontinued insurance operations                  $   97,755   $  (6,276)  $   91,479   $   90,022   $ (15,846) $   74,176
==================================================================================================================================
Earnings per share based on income
   before extraordinary item and
   discontinued insurance operations (d)               $     .83               $      .78   $      .76              $      .63
==================================================================================================================================

</TABLE>

INTRODUCTION TO NOTES:  The following is a summary of the adjustments  reflected
in the pro forma condensed Statements of Income. Following the distribution,  in
the opinion of management,  expenses of Ethyl would not have differed materially
from the amounts remaining in the Ethyl consolidated  financial statements after
eliminating those expenses attributable to Albemarle.

NOTES:

(a) To eliminate the historical income and expenses of Albemarle for the
    respective periods presented, as if the distribution had occurred on January
    1, 1993.

(b) To eliminate interest expense that would have been incurred by Albemarle on
    debt transferred to Albemarle (as if the distribution  had occurred  on
    January 1,  1993),  including  debt under the credit facility transferred
    from Ethyl.  Interest eliminated under the credit facility was computed at
    the weighted-average interest rates of 3.8% and 3.6% for the two months
    ended  February 28, 1994,  and the year ended December 31, 1993,
    respectively,  less  capitalized  interest of $124,000 and $1,101,000,
    respectively.  Interest  rates  used  to  calculate  the  Albemarle interest
    eliminated  under the credit  facility are those rates that were available
    to Ethyl under its revolving  credit  agreement  during the respective
    periods presented.  Such rates were used because, during management's
    negotiations to obtain the credit  facility,  the rates available to Ethyl
    and Albemarle on a stand-alone basis were  approximately the same.
    Management was advised that these rates would have been the same during the
    respective periods presented.

(c) To record the estimated income-tax effect for the  pro forma adjustments
    described in Notes (a) and (b) for the two months ended February 28, 1994,
    and the year ended December 31, 1993, respectively.

(d) Historical and pro forma earnings per share, based on  income
    before discontinued insurance operations and extraordinary item are computed
    after deducting applicable preferred-stock  dividends from such income and
    using the weighted-average number of shares of common stock and common-stock
    equivalents outstanding for the periods presented.

3. SUPPLEMENTAL CASH-FLOW INFORMATION:
--------------------------------------------------------------------------------

   Supplemental  information for the Consolidated Statements of Cash Flows is as
follows:

					  (In Thousands)
				     1995         1994        1993
---------------------------------------------------------------------
Cash paid during the year for:
  Income taxes                      $22,881     $ 45,513    $110,867
  Interest and financing expenses
   (net of capitalization)           31,390       24,118      45,352
Supplemental investing and
  financing non-cash transactions:
   Dividend of common stock
     of Albemarle Corporation -
     at book value                        -      399,957           -
   Dividend of common stock
     of First Colony Corporation -
     at book value                        -            -     677,449
   Assumption of liabilities in
     connection with the acquisition
     of Potasse et Produits Chimiques
     (PPC) in February 1993               -            -      49,000

   Also see Notes 2 and 20 with respect to spun-off operations.


4. GEOGRAPHIC AREAS:
--------------------------------------------------------------------------------

   The  geographic  areas table on page 24 (and the related notes on page 26) is
an integral part of the consolidated financial statements. Information about the
Company's geographic areas is presented for the years 1991-1995.  The discussion
of geographic areas information is unaudited.


5. CASH & CASH EQUIVALENTS:
-------------------------------------------------------------------

   Cash and cash equivalents consist of the following:

					    (In Thousands)
					    1995      1994
-------------------------------------------------------------------
Cash and time deposits                     $21,167   $31,166
Short-term securities                        8,805         -
-------------------------------------------------------------------
  Total                                    $29,972   $31,166
===================================================================

   Short-term  securities  (generally  commercial paper maturing in less than 90
days) are stated at cost plus accrued income, which approximates market value.


6. INVENTORIES:
--------------------------------------------------------------------------------

   Domestic  inventories  stated on the LIFO basis amounted to  $58,750,000  and
$49,889,000  at  December  31,  1995 and  1994,  respectively,  which  are below
replacement cost by approximately $20,310,000 and $17,080,000, respectively.


7. DEFERRED INCOME TAXES & PREPAID EXPENSES:
--------------------------------------------------------------------------------

   Deferred income taxes and prepaid expenses consist of the following:

					    (In Thousands)
					   1995       1994
----------------------------------------------------------------
Deferred income taxes - current           $15,499   $20,404
Prepaid expenses                            7,708     5,340
----------------------------------------------------------------
  Total                                   $23,207   $25,744
================================================================


8. PROPERTY, PLANT & EQUIPMENT, AT COST:
--------------------------------------------------------------------------------

   Property, plant and equipment, at cost, consist of the following:

					   (In Thousands)
					  1995        1994
--------------------------------------------------------------
Land                                   $  49,346  $  48,781
Land improvements                         29,516     27,947
Buildings                                 94,270     94,224
Machinery and equipment                  489,511    408,982
Capitalized interest                      21,004     19,283
Construction in progress                  29,988     85,162
--------------------------------------------------------------
  Total                                 $713,635   $684,379
--------------------------------------------------------------

   The cost of the property,  plant and equipment is  depreciated,  generally by
the straight-line method, over the following useful lives:

Land improvements                                5-30 years
Buildings                                       10-40 years
Machinery and equipment                          3-25 years

   Interest  capitalized on significant  capital projects in 1995, 1994 and 1993
was $2,223,000,  $8,060,000 and $6,864,000,  respectively, while amortization of
capitalized interest (which is included in depreciation expense) was $1,878,000,
$1,294,000 and $3,246,000, respectively.


9. ACCRUED EXPENSES:
--------------------------------------------------------------------------------

   Accrued expenses consist of the following:

					    (In Thousands)
					   1995       1994
----------------------------------------------------------------
Employee benefits, payroll and
  related taxes                            $13,078   $11,871
Other                                       45,604    61,247
----------------------------------------------------------------
   Total                                   $58,682   $73,118
================================================================


10. LONG-TERM DEBT:
--------------------------------------------------------------------------------

   A summary of long-term debt maturities at December 31, 1995, is listed below:

						  (In Thousands)

						       Variable-
				       Variable-         Rate
					 Rate           Medium-
					 Bank            Term
					 Loans           Notes         Total
--------------------------------------------------------------------------------
1996                                                                       -
1997                                                   $ 6,750       $ 6,750
1998                                                     6,750         6,750
1999                                                     6,750         6,750
2000                                   $270,000          6,750       276,750
2001                                                     6,750         6,750
--------------------------------------------------------------------------------
				       $270,000        $33,750       303,750
================================================================================
Less unamortized discount                                               (777)
--------------------------------------------------------------------------------
Total long-term debt at December 31, 1995                           $302,973
================================================================================


   The  Company  has an  unsecured  competitive  advance  and  revolving  credit
facility  agreement  with a group of banks  permitting  it to  borrow up to $500
million. Fees of up to 3/8 of 1% per annum are assessed on the unused portion of
the commitment. The credit facility permits borrowing for the next four years at
various  interest  rate  options.  The facility  contains a number of covenants,
representations  and events of default typical of a credit facility agreement of
this size and nature,  including  financial  covenants  requiring the Company to
maintain consolidated  indebtedness (as defined) of not more than 60% of the sum
of  shareholders'   equity  (as  defined)  and  consolidated   indebtedness  and
maintenance  of  minimum  shareholders'  equity of at least  $250  million.  The
Company was in compliance  with such covenants at December 31, 1995.  Under this
agreement,  $270 million was borrowed at December 31, 1995. Amounts  outstanding
at  February  16,  2000,  mature  on  that  date.   Average  interest  rates  on
variable-rate bank loans during 1995 and 1994 were 6.4% and 4.5%, respectively.

   The Company also has four  uncommitted  agreements  with banks  providing for
immediate  borrowings up to a maximum of $155 million at the  individual  bank's
money-market  rate. No amounts were borrowed under these  agreements at December
31, 1995. The average  interest  rates on borrowings  during 1995 and 1994 under
these agreements were 6.1% and 4.0%, respectively.

   The  Company's  $33.75-million  variable-rate  (ranging  from  8.6% to 8.86%)
Medium-Term  Notes were  issued in five  series (1  through 5) of $6.75  million
each, which are due annually in serial order at 100% of their principal  amount,
beginning December 15, 1997, through December 15, 2001.


11. OTHER NONCURRENT LIABILITIES:
----------------------------------------------------------------

   Other noncurrent liabilities consist of the following:

					    (In Thousands)
					   1995       1994
----------------------------------------------------------------
Provision for environmental remediation
  and future shutdown costs                $52,511  $47,609
Other                                       31,660   31,293
----------------------------------------------------------------
   Total                                   $84,171  $78,902
================================================================

12. CAPITAL STOCK:
--------------------------------------------------------------------------------

   SHAREHOLDER RIGHTS PLAN - Pursuant to a Rights Agreement dated September 24,
1987,  the Company  distributed  one Preferred  Stock,  Series B purchase  right
("Right")  for each  outstanding  share of Common Stock to the  shareholders  of
record on October 5, 1987. Unless the Board of Directors directs otherwise,  one
additional  Right will be issued with respect to each additional share of Common
Stock  issued prior to the  occurrence  of certain  potential  change-in-control
events. The Rights become  exercisable upon certain potential  change-in-control
events.  When  exercisable,   the  Rights  entitle  holders  to  purchase  2.522
one-thousandth of a share (subject to adjustment) of Preferred Stock,  Series B,
and upon the  occurrence  of  certain  events,  the  Rights  entitle  holders to
purchase  shares of Common  Stock at a  substantial  discount.  Exercise  of the
Rights  will  cause  substantial  dilution  to a person or group  attempting  to
acquire  control of the Company  without the approval of the Board of Directors.
The Board of Directors  may, under certain  circumstances,  cause the Company to
redeem the Rights in whole,  but not in part, at a price of $.01 per Right.  The
Rights expire on September 24, 1997, if not redeemed earlier. The Rights have no
voting or dividend privileges. Until such time as the Rights become exercisable,
they are attached to and do not trade separately from the Common Stock.

   STOCK-OPTION PLAN - The Company has an incentive  stock-option  plan, whereby
incentive  stock  options  and  nonqualifying  stock  options  may be granted to
officers  and other key  employees  to purchase a specified  number of shares of
common stock at a price not less than the fair market value on the date of grant
and for a term not to exceed 10 years.  Certain options become  exercisable upon
the attainment of specified earnings  objectives or market price appreciation of
the Company's  common stock. The remaining  options become  exercisable one year
after the grant date. In addition to the stock options, the optionee also may be
granted a stock  appreciation  right (SAR).  To date,  SARs  generally have been
granted for the same number of shares subject to related  options.  During 1994,
the Board of Directors of the Company  unanimously  adopted and the shareholders
approved an amendment to the Company's  incentive  stock option plan  increasing
the number of shares  issuable  under the option plan by 5,900,000 to 11,900,000
and  established  an annual  limit of  200,000 on the number of shares for which
options  may be granted to an  individual.  Activity  in 1993,  1994 and 1995 is
shown below:


					  Shares     Option Prices
---------------------------------------------------------------------
Outstanding at January 1, 1993            653,518    $20.07-$31.49
Adjustments for First Colony spin-off     238,711    $13.22-$20.73
Exercised                                 (71,865)   $13.22-$28.74
Surrendered upon exercise of SARs         (59,212)   $14.49-$26.13
Lapsed                                   (153,539)   $15.94-$31.49
---------------------------------------------------------------------
Outstanding at December 31, 1993          607,613    $13.22-$20.73
Granted                                 3,042,000    $       12.50
Adjustment for Albemarle spin-off         168,650    $ 9.00-$14.11
Exercised                                 (73,475)   $ 9.00-$17.20
Surrendered upon exercise of SARs         (48,402)   $ 9.86-$18.85
Lapsed                                   (413,112)   $ 9.86-$20.73
---------------------------------------------------------------------
Outstanding at December 31, 1994        3,283,274    $ 9.00-$14.11
Exercised                                  (9,434)   $       10.85
---------------------------------------------------------------------
Outstanding at December 31, 1995        3,273,840    $ 9.00-$14.11
=====================================================================

   All of the  unexercised  options and related SARs granted  prior to 1994 were
exercisable at December 31, 1995, while 582,400 of the stock options and related
SARs granted in 1994 were exercisable at December 31, 1995. On December 31, 1994
and 1995, 6,156,014 shares were available for grant.

   During 1995, the FASB issued Statement of Financial  Accounting Standards No.
123,  "Accounting for Stock-Based  Compensation."  This standard,  which will be
effective  for the fiscal year ended  December  31,  1996,  defines a fair value
method  of  accounting  for  employee  stock  option  plans and  similar  equity
instruments,  but also allows for continued use of present accounting  standards
for  measuring  expense  for the  employee  compensation  costs of these  plans.
Entities electing to remain with present  accounting  standards to measure costs
must make  certain pro forma  disclosures  as if the fair value based method had
been  applied.  The Company plans to continue  recognizing  expense for employee
stock-based  compensation  under the current APB Opinion No. 25 methodology  and
expects  incremental  pro  forma  amounts  disclosed  to be  immaterial  to 1996
earnings.

   REDEEMABLE PREFERRED STOCK - The Cumulative First Preferred 6% Series A stock
of 2002 shares, which was previously  outstanding,  was called for redemption in
December 1994 at $101 per share, plus accrued dividends.

13. GAINS ON FOREIGN CURRENCY:
--------------------------------------------------------------------------------

   Foreign currency  transaction  adjustments resulted in gains of $1,827,000 in
1995, $1,968,000 in 1994 and $1,725,000 in 1993 and are included in income.


14. CONTRACTUAL COMMITMENTS & CONTINGENCIES:
--------------------------------------------------------------------------------

   Rental expense was $13,703,000 for 1995, $17,120,000 for 1994 and $29,680,000
for 1993.

   The Company has a number of operating lease agreements primarily for office
space, transportation equipment and storage facilities.

   Future lease payments for the next five years for all noncancelable leases as
of December 31, 1995, are $8,481,000 for 1996,  $5,152,000 for 1997,  $2,005,000
for 1998, $1,133,000 for 1999, $865,000 for 2000, and amounts payable after 2000
are $3,907,000.

   Contractual obligations for plant construction and purchases of real property
and equipment amounted to approximately $10,600,000 at December 31, 1995.

   The Company and Albemarle  entered into agreements,  dated as of February 28,
1994,  pursuant to which the Company and Albemarle agreed to coordinate  certain
facilities  and services of adjacent  operating  sites at plants in  Orangeburg,
South Carolina; Houston, Texas; and Feluy, Belgium. In addition, the Company and
Albemarle  entered into  agreements  providing  for the blending by Albemarle of
Ethyl's additive products and the production of antioxidants and manganese-based
antiknock compounds at the Orangeburg plant. Ethyl was billed  approximately $48
million in connection with these agreements during both 1995 and 1994.

   The Company is from time to time subject to routine litigation  incidental to
its business.  The Company is not a party to any pending litigation  proceedings
that are expected to have a materially  adverse effect on the Company's  results
of operations or financial  condition.  Further,  no additional  disclosures are
required in conformity with FASB Statement No. 5,  "Accounting for
Contingencies,"  due to immateriality.

   At December 31, 1995 and 1994,  the Company had accruals of  $41,600,000  and
$38,400,000,  respectively,  for  environmental  liabilities.  In developing its
estimates  of  environmental  remediation  and  monitoring  costs,  the  Company
considers,  among other things,  risk-based  assessments  of the  contamination,
currently available  technological  solutions,  alternative cleanup methods, and
prior Company experience in remediation of contaminated  sites, all of which are
based on presently  enacted laws and  regulations.  Amounts  accrued do not take
into consideration  claims for recoveries from insurance.  Although studies have
not been completed for certain sites, some amounts generally are estimated to be
expended over extended  periods.  When specific amounts within a range cannot be
determined, the Company has accrued the minimum amount in that range.

   Environmental  exposures  are  difficult  to assess and estimate for numerous
reasons including the complexity and differing  interpretations  of regulations,
lack of reliable data,  multiplicity of possible solutions,  and length of time.
As the scope of the Company's  environmental  contingencies becomes more clearly
defined,  it is possible that  expenditures  in excess of those amounts  already
accrued may be necessary.  However, management believes that these overall costs
are  expected to be incurred  over an extended  period of time and, as a result,
such   contingencies  are  not  expected  to  have  a  material  impact  on  the
consolidated financial position or liquidity of the Company, but they could have
a material  adverse  effect on the Company's  results of operations in any given
future quarterly or annual period.


15. PENSION PLANS & OTHER POSTRETIREMENT BENEFITS:
--------------------------------------------------------------------------------

   U.S. PENSION PLANS - The Company has noncontributory  defined-benefit pension
plans  covering  most U.S.  employees.  The  benefits  for these plans are based
primarily on years of service and employees' compensation. The Company's funding
policy  complies  with the  requirements  of federal law and  regulations.  Plan
assets  consist  principally  of common  stock,  U.S.  government  and corporate
obligations and group annuity contracts. The pension information for all periods
includes amounts related to the Company's salaried plan and to the hourly plans.

   The major  changes  from 1993 to 1994 in the  following  tables  reflect  the
effects of the  spin-off of  Albemarle  at the close of business on February 28,
1994,  with the  related  wage-roll  plans and a portion  of the  salaried  plan
identified with employees who were transferred to Albemarle. Some of the changes
from 1994 to 1995  reflect the absence of the impact of the  Albemarle  plans in
1995 versus the inclusion of two months' effects in 1994.

   As a result of the spin-off,  plan assets and projected  benefit  obligations
reported at December 31, 1993,  were reduced by $286,035,000  and  $240,278,000,
respectively,  as of January 1, 1994.  The expected  returns and  interest  cost
reported for 1994 and 1995 are computed based upon the lesser amounts.


The components of net pension income are as follows:

					 (In Thousands)
Years ended December 31             1995      1994       1993
-------------------------------------------------------------------
Return on plan assets:
Actual return                     $48,411   $ 32,018   $ 50,130
Actual return (higher)
  lower than expected             (17,612)     3,256      3,679
-------------------------------------------------------------------
Expected return                    30,799     35,274     53,809
Amortization of transition asset    4,277      4,730      6,995
Service cost (benefits earned
  during the year)                 (2,821)    (5,462)   (12,355)
Interest cost on projected
  benefit obligation              (22,753)   (24,122)   (36,978)
Amortization of prior
  service costs                    (2,683)    (2,958)    (4,318)
-------------------------------------------------------------------
Net pension income                $ 6,819   $  7,462   $  7,153
===================================================================

   Amortization of the transition asset is based on the amount determined at the
date of adoption of FASB Statement No. 87.

   Net pension income and plan obligations are calculated using assumptions of
estimated discount and interest rates and rates of projected  increases in
compensation.  The discount  rate on projected benefit obligations was primarily
assumed to be 7.0% at December 31, 1995, 8.25% at December 31, 1994, and 6.75%
at December 31, 1993. The assumed  interest rate at the  beginning  of each year
is the same as the  discount  rate at the end of each prior year. The rates of
projected compensation increase were assumed to be primarily 4.5% at December
31, 1995, 1994 and 1993. The expected  long-term rate of return on plan assets
was assumed to be primarily  9% each year.  Net pension income  (preceding page)
is determined using  assumptions as of the beginning of each year. Funded status
(table below) is determined using assumptions as of the end of each year.

   The following  table  presents a  reconciliation  of the funded status of the
U.S.  pension  plans to prepaid  pension  expense,  which is  included in "Other
assets and deferred charges:"

					     (In Thousands)
Years ended December 31                      1995       1994
----------------------------------------------------------------
Plan assets at fair value                  $387,484  $367,471
Less actuarial present value of
  benefit obligations:
   Accumulated benefit obligation
     (including vested benefits of
     $298,293 and $271,458, respectively)   302,079   274,346
   Projected compensation increase           18,015    13,666
----------------------------------------------------------------
   Projected benefit obligation             320,094   288,012
Plan assets in excess of projected
  benefit obligation                         67,390    79,459
Unrecognized net loss (gain)                  1,609   (16,087)
Unrecognized transition asset being
  amortized principally over 16 years       (26,584)  (30,861)
Unrecognized prior-service costs
  being amortized                            22,897    24,992
----------------------------------------------------------------
Prepaid pension expense                   $  65,312  $ 57,503
================================================================

   One of the  Company's  U.S.  pension  plans  is  the  supplemental  executive
retirement plan (SERP), which is an unfunded defined benefit plan. The actuarial
present value of accumulated  benefit  obligations related to the Company's SERP
totalled   $11,999,000   and   $10,263,000   at  December  31,  1995  and  1994,
respectively.  The prepaid pension expense asset in the table above is net of an
accrued pension expense  liability of $10,443,000 and $9,255,000  related to the
SERP at December 31, 1995 and 1994,  respectively.  Pension expense for the SERP
totalled  $1,456,000,  $1,459,000  and  $1,550,000  for  1995,  1994  and  1993,
respectively.

   FOREIGN PENSION PLANS - Pension  coverage for  employees  of the  Company's
foreign subsidiaries is provided through separate plans.  Obligations under such
plans are systematically provided for by depositing funds with trustees or under
insurance  policies.  1995,  1994 and 1993  pension  cost for  these  plans  was
$1,195,000, $3,317,000 and $2,265,000, respectively. The actuarial present value
of  accumulated  benefits at December  31, 1995 and 1994,  was  $15,570,000  and
$12,159,000,  substantially  all of which was vested,  compared  with net assets
available for benefits of $18,811,000 and $15,571,000, respectively.

   CONSOLIDATED  - Consolidated  net pension income for 1995,  1994 and 1993 was
$5,624,000, $4,145,000 and $4,888,000, respectively.

   OTHER POSTRETIREMENT BENEFITS - The Company also provides postretirement
medical benefits and life insurance for certain groups of retired employees
which it accounts for based on FASB Statement No. 106.

   The Company  continues  to fund  medical  and life  insurance  benefit  costs
principally  on a  pay-as-you-go  basis.  Although the  availability  of medical
coverage after retirement varies for different groups of employees, the majority
of employees who retire from the Company before  becoming  eligible for Medicare
can  continue  group  coverage  by paying the full cost of a  composite  monthly
premium  designed to cover the claims incurred by active and retired  employees.
The availability of group coverage for Medicare-eligible retirees also varies by
employee group with coverage  designed  either to supplement or coordinate  with
Medicare. Retirees generally pay a portion of the cost of the coverage.

   The components of net periodic postretirement benefit cost are as follows:

						 (In Thousands)
Years ended December 31                           1995      1994
-----------------------------------------------------------------------
Service cost (benefits attributed to employee
  service during the year)                      $  (720)   $(1,789)
Interest cost on accumulated postretirement
  benefit obligation                             (3,654)    (4,419)
Amortization of prior service cost                   72          -
Actual return on plan assets                      2,309      2,101
-----------------------------------------------------------------------
Net periodic postretirement benefit cost        $(1,993)   $(4,107)
=======================================================================

   Summary information on the Company's plans is as follows:

						 (In Thousands)
Years ended December 31                           1995      1994
----------------------------------------------------------------------
Accumulated postretirement benefit
 obligation (APBO) for:
   Retirees                                     $40,277    $41,985
   Fully eligible, active plan participants       2,669      2,008
   Other active plan participants                10,163      7,709
----------------------------------------------------------------------
						 53,109     51,702
Plan assets at fair value                       (25,615)   (24,447)
Unrecognized prior service cost                     863          -
Unrecognized net (loss) gain                       (270)       717
----------------------------------------------------------------------
Accrued postretirement benefit cost             $28,087    $27,972
======================================================================

   Plan assets are held under an  insurance  contract  and  reserved for retiree
life-insurance  benefits.

   As a  result  of the  spin-off,  plan  assets  and projected benefit
obligations reported at December 31, 1993, were reduced by  approximately
$7,242,000 and  $46,002,000,  respectively,  as of January 1, 1994.  The
expected  returns and interest  costs  reported for 1995 and 1994 are computed
based on the lesser amounts.

   The discount rate used in determining the APBO was 7.0% at December 31, 1995,
8.25% at  December  31,  1994 and  6.75% at  December  31,  1993.  The  expected
long-term  rate of return on plan assets used in  determining  the net  periodic
postretirement  benefit  cost was 9% in 1995 and  1994,  and the  estimated  pay
increase was 4.5% at December 31, 1995,  1994 and 1993. The assumed  health-care
cost  trend  rate  used in  measuring  the  accumulated  postretirement  benefit
obligation  was 14% in 1993,  13% in 1994 and 12% in 1995,  declining  by 1% per
year to an ultimate rate of 7%, except that  managed-care  costs were assumed to
begin at 11% in 1993,  10% in 1994 and 9% in 1995,  declining  by 1% per year to
6%.

   If the  health-care  cost-trend  rate  assumptions  were increased by 1%, the
APBO, as of December 31, 1995, would be increased by approximately $3.1 million.
The  effect of this  change on the sum of the  service  cost and  interest  cost
components  of net  periodic  postretirement  benefit  cost for 1995 would be an
increase of about $0.3 million.

   CHANGES IN ESTIMATES  - The  lower  discount  rate at  December  31,  1995,
increased the pension  accumulated benefit obligation by about $31.3 million and
the pension  projected  benefit  obligation  by about $33.2  million.  The lower
discount  rate at December 31, 1995,  increased the  postretirement  accumulated
benefit obligation by approximately $6.3 million. The rate-change effects on net
pension  income  and  postretirement  benefit  costs  are  not  material  to the
Company's financial statements.

16. INCOME TAXES:
--------------------------------------------------------------------------------

   Income before income taxes,  extraordinary  item and  discontinued  insurance
operations, and current and deferred income taxes are composed of the following:

				      (In Thousands)

Years ended December 31            1995     1994        1993
-------------------------------------------------------------------
Income  before  income  taxes,
  extraordinary  item and
  discontinued  insurance
  operations:
   Domestic                    $  90,409   $103,083     $121,486
   Foreign                        25,767     38,063       12,021
-------------------------------------------------------------------
     Total                     $116,176    $141,146     $133,507
===================================================================
Current income taxes:
   Federal                     $  15,442   $ 19,451     $ 33,195
   State                           2,409      3,109        4,171
   Foreign                         8,648     10,569       13,782
-------------------------------------------------------------------
     Total                        26,499     33,129       51,148
-------------------------------------------------------------------
Deferred income taxes:
   Federal                        12,002      6,180      (10,944)
   State                           1,427        (45)        (282)
   Foreign                         2,285      4,127        3,563
-------------------------------------------------------------------
     Total                        15,714     10,262       (7,663)
-------------------------------------------------------------------
Total income taxes             $  42,213   $ 43,391     $ 43,485
===================================================================

   The significant differences between the U.S. federal statutory rate and the
effective income tax rate are as follows:

					      % of Income
					   Before Income Taxes
----------------------------------------------------------------------
					  1995    1994     1993
----------------------------------------------------------------------
Federal statutory rate                    35.0%   35.0%    35.0%
State taxes, net of federal tax benefit    2.1     1.8      1.9
Foreign sales corporation benefit         (0.6)   (1.2)    (1.8)
Research tax credit                       (1.7)      -        -
Provision for legal settlement             0.9       -        -
Gain on sale of subsidiary                   -    (3.8)    (1.7)
Deferred-tax benefit attributable to
  Whitby Research downsizing                 -       -     (7.0)
Higher net tax on foreign related
  operations primarily due to absence
  of tax benefit on significant losses
  of Belgian subsidiary                      -       -      3.9
Increase in federal deferred taxes to
  enacted 35% rate                           -       -      1.8
Other items, net                           0.6    (1.1)     0.5
----------------------------------------------------------------------
Effective income tax rate                 36.3%   30.7%    32.6%
======================================================================

   Deferred income taxes result from temporary differences in the recognition of
income and expenses for financial and income tax reporting  purposes,  using the
liability or balance sheet method.  Such temporary  differences result primarily
from differences  between the financial statement carrying amounts and tax bases
of assets  and  liabilities  using  enacted  tax rates in effect in the years in
which the differences are expected to reverse.

   Federal income tax legislation enacted in 1993 increased the corporate income
tax rate to 35%  retroactive to January 1, 1993. This rate was applied to all
future years and  resulted in an increase in the deferred  income tax liability
and a decrease in net income of $2.3 million, or $.02 per share in 1993.  The
deferred  income  tax  assets and  deferred  income tax  liabilities recorded on
the balance sheets as of December 31, 1995 and 1994, are as follows:

					    (In Thousands)
Deferred tax assets:                       1995       1994
----------------------------------------------------------------
  Environmental reserves                  $14,720   $12,892
  Future employee benefits                  3,873     3,903
  Undistributed earnings of
   foreign subsidiaries                     5,657     7,267
  Intercompany profit in inventories        3,497     4,916
  Inventory capitalization                    905       654
  Facilities write-down and other costs     2,758     5,555
  Foreign currency translation adjustment     262     1,481
  Other                                     3,887     3,510
----------------------------------------------------------------
Deferred tax assets                        35,559    40,178
----------------------------------------------------------------
Deferred tax liabilities:
  Depreciation                             36,063    25,259
  Future employee benefits                 14,302    11,441
  Capitalization of interest                1,287     2,011
  Other                                     9,153     9,073
----------------------------------------------------------------
Deferred tax liabilities                   60,805    47,784
----------------------------------------------------------------
Net deferred tax liabilities              $25,246   $ 7,606
================================================================
Reconciliation to financial statements:
Current tax assets                        $15,499   $20,404
Deferred tax liabilities                   40,745    28,010
----------------------------------------------------------------
Net deferred tax liabilities              $25,246   $ 7,606
================================================================

   Based on current U.S. income tax rates, it is anticipated  that no additional
U.S.  income  taxes  would be  incurred  if the  unremitted  earnings  of the
Company's  foreign  subsidiaries  were  remitted  to  Ethyl  Corporation  due to
available foreign tax credits.

17. FAIR VALUE OF FINANCIAL INSTRUMENTS:
--------------------------------------------------------------------------------

   The following  methods and  estimates  were used by the Company in estimating
the fair values of its outstanding  financial instruments in conformity with the
disclosure requirements of FASB Statement No. 107, "Disclosures About Fair Value
of Financial Instruments."

   CASH & CASH EQUIVALENTS - The carrying value approximates fair value.

   LONG-TERM DEBT - The fair value of the Company's  long-term debt is estimated
based on current rates  available to the Company for debt of the same  remaining
duration.

   The estimated fair values of Ethyl's financial instruments are as follows:

					(In Thousands)
				      Carrying     Fair
					Value      Value
------------------------------------------------------------
December 31, 1995

Cash and cash equivalents            $ 29,972    $  29,972
Long-term debt, including
  current maturities                 $302,973     $306,279

December 31, 1994
Cash and cash equivalents            $ 31,166    $  31,166
Long-term debt, including
  current maturities                 $349,766     $360,489


18. SPECIAL CHARGES:
--------------------------------------------------------------------------------

   A special  charge in 1995  amounting to $4,750,000  ($4,150,000  after income
taxes, or $0.04 per share) covered a provision for the cost of an expected legal
settlement by a subsidiary.

   Special  charges in 1994  amounted to  $2,720,000  ($1,690,000  after  income
taxes, or $.01 per share) consisting of a charge of $10,720,000  primarily for a
provision for environmental remediation as well as other costs largely offset by
the benefit of an $8,000,000 legal settlement.

   Special  charges for 1993 amounted to $36,150,000  ($22,400,000  after income
taxes,  or $.19  per  share),  of  which  $14,200,000  was  incurred  for  plant
write-down and other related costs in connection with the Company's  decision to
discontinue  production  of lead  antiknock  compounds  at Ethyl's  subsidiary's
Sarnia,  Ontario,  plant. This decision resulted from entering into an agreement
with The Associated Octel Company whereby Ethyl is assured of an ample long-term
supply of lead antiknock compounds. The remainder of the special charges related
to costs of work-force reductions in the U.S. and Europe amounting to $7,635,000
and $14,315,000 for downsizing  costs of Whitby  Research,  Inc.,  relocation of
employees and other miscellaneous costs.


19. EXTRAORDINARY CHARGE:
--------------------------------------------------------------------------------

   The  extraordinary  charge of  $5,000,000,  or $.04 per share  (net of income
taxes of  $3,000,000),  due to early  extinguishment  of debt  results  from the
Company redeeming its $116.25-million 93/8% Sinking Fund Debentures due December
15,  2016,  on  December  15,  1993,  at a  redemption  price of $105.081 of the
principal  amount  and the  write-off  of  remaining  deferred  financing  costs
associated with the sinking fund debt.


20. DISCONTINUED INSURANCE OPERATIONS:
--------------------------------------------------------------------------------

   On  July 1,  1993,  the  Company's  80-percent  investment  in  First  Colony
Corporation   was  spun  off  in  a  tax-free   distribution  to  the  Company's
shareholders.  The  distribution  consisted  of the net assets of the  Company's
investment in First Colony  Corporation  totaling  $757,211,000  less unrealized
gains on marketable equity securities  amounting to $78,227,000 (net of deferred
income taxes of $40,299,000)  and  retroactive  income tax charges of $1,535,000
due to a change in federal tax legislation.

   The  results  of  operations  during  the  first  six  months of 1993 were as
follows:

STATEMENT OF INCOME                           (In Thousands)
						Six Months
						   Ended
						 June 30,
						   1993
--------------------------------------------------------------------
Revenues                                        $737,137
Benefits and expenses                            566,174
--------------------------------------------------------------------
Income before income taxes                       170,963
Income taxes                                      58,316
--------------------------------------------------------------------
Net income                                       112,647
Less provision for minority interest              22,164
--------------------------------------------------------------------
Income from discontinued
  insurance operations                          $ 90,483
====================================================================

21. SUBSEQUENT EVENT:
--------------------------------------------------------------------------------

ACQUISITION OF TEXACO LUBRICANT ADDITIVES BUSINESS (UNAUDITED) - On February 29,
1996, the Company completed the acquisition of the worldwide lubricant additives
business  of Texaco  Inc.,  including  manufacturing  and  blending  facilities,
identifiable  intangibles and working capital. The acquisition,  to be accounted
for under  the  purchase  method,  included  a cash  payment  of $135.9  million
(subject to adjustment  based on final  working  capital  determinations)  and a
future  contingent  payment of up to $60 million.  The cash payment was financed
primarily under the Company's  revolving credit agreement.  The payment of up to
$60 million will become due on February 26, 1999,  with interest  payable on the
contingent debt until such date. The actual amount of the contingent payment and
total interest will be determined using an agreed-upon  formula based on volumes
of certain acquired product lines shipped during the calendar years 1996 through
1998,  as  specified  in  the  contingent   note   agreement.   Texaco  retained
substantially all noncurrent liabilities.


		MANAGEMENT'S REPORT ON THE FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


						Ethyl Corporation & Subsidiaries

   Ethyl  Corporation's  management  has prepared the financial  statements  and
related  notes  appearing on pages 28 through 44 in  conformity  with  generally
accepted accounting principles. In so doing, management makes informed judgments
and estimates of the expected  effects of certain events and transactions on the
reported  amounts  of  assets  and  liabilities  at the  dates of the  financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting periods.  Financial data appearing elsewhere in this annual report are
consistent with these financial statements. However, actual results could differ
from the estimates on which these financial statements are based.

   The Company  maintains a system of internal  controls to provide  reasonable,
but not absolute,  assurance of the reliability of the financial records and the
protection  of assets.  The  internal  control  system is  supported  by written
policies and procedures,  careful selection and training of qualified  personnel
and an extensive internal audit program.

   These financial  statements  have been audited by Coopers & Lybrand,  L.L.P.,
independent  certified  public  accountants.  Their audit was made in accordance
with  generally  accepted  auditing  standards  and included a review of Ethyl's
internal  accounting  controls to the extent  considered  necessary to determine
audit procedures.

   The audit  committee  of the board of  directors,  composed  only of  outside
directors,  meets  with  management,   internal  auditors  and  the  independent
accountants to review accounting,  auditing and financial reporting matters. The
independent  accountants  are  appointed by the board on  recommendation  of the
audit committee, subject to shareholder approval.


		       REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------




certified public accountants    Riverfront Plaza West       in principal areas
				901 East Byrd Street        of the world
				Suite 1200
				Richmond, Virginia 23219
				Telephone (804) 697-1900




TO THE BOARD OF DIRECTORS & SHAREHOLDERS OF ETHYL CORPORATION

   We have  audited  the  accompanying  consolidated  balance  sheets  of  Ethyl
Corporation and Subsidiaries (the Company) as of December 31, 1995 and 1994, and
the related  consolidated  statements of income,  shareholders'  equity and cash
flows for each of the three years in the period ended  December 31, 1995.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

   We  conducted  our audits in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion,  the financial  statements referred to above present fairly,
in  all  material  respects,   the  consolidated  financial  position  of  Ethyl
Corporation  and  Subsidiaries  as of  December  31,  1995  and  1994,  and  the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity  with generally
accepted accounting principles.




/s/ COOPERS & LYBRAND L.L.P.
January 29, 1996



			       FIVE-YEAR SUMMARY

					       Ethyl Corporation & Subsidiaries
--------------------------------------------------------------------------------

INTRODUCTION TO THE FIVE-YEAR SUMMARY:  The following Five-Year Summary includes
the results of the  businesses  spun off as  Albemarle  Corporation  through the
spin-off  date at the close of business  on February  28,  1994.  The  financial
position  and other data after that date  reflect the impact of the  spin-off of
Albemarle. The results and net assets of the Insurance segment, spun off on July
1, 1993, are reported as discontinued insurance operations.

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------------
(In Thousands Except Per-Share Amounts)
Years Ended December 31                                                          1995                     1994             1993
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                    <C>              <C>
RESULTS OF OPERATIONS
Net sales                                                                      $960,450               $1,174,086       $1,938,390
Costs and expenses                                                              813,271                1,003,624        1,734,635
Special charges (1)                                                               4,750                    2,720           36,150
----------------------------------------------------------------------------------------------------------------------------------
   Operating profit                                                             142,429                  167,742          167,605
Interest and financing expenses                                                  26,833                   25,378           44,085
Gain on sale of 20% of First Colony Corporation (2)                                   -                        -                -
Other (income) expenses, net                                                       (580)                   1,218           (9,987)
----------------------------------------------------------------------------------------------------------------------------------
Income  before  income  taxes,   extraordinary  charge,
  cumulative  effect  of accounting changes and discontinued
  insurance operations                                                          116,176                  141,146          133,507
Income taxes                                                                     42,213                   43,391           43,485
----------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary charge, cumulative effect of accounting
changes and discontinued insurance operations                                    73,963                   97,755           90,022
Extraordinary after-tax charge due to early extinguishment of debt (3)                -                        -           (5,000)
Cumulative effect of accounting changes for: (4)
   Postretirement health-care benefits (net of tax)                                   -                        -                -
   Deferred income taxes                                                              -                        -                -
----------------------------------------------------------------------------------------------------------------------------------
Income before discontinued insurance operations                                  73,963                   97,755           85,022
Income from discontinued insurance operations                                         -                        -           90,483
----------------------------------------------------------------------------------------------------------------------------------
Net income                                                                     $ 73,963               $   97,755       $  175,505
==================================================================================================================================
FINANCIAL POSITION AND OTHER DATA
Total assets - before discontinued insurance operations                        $983,787               $1,030,415       $2,009,198
Net assets of discontinued insurance operations                                       -                        -                -
----------------------------------------------------------------------------------------------------------------------------------
   Total                                                                       $983,787               $1,030,415       $2,009,198
==================================================================================================================================
Continuing Operations:
   Working capital                                                             $242,742               $  248,650       $  407,182
   Current ratio                                                              2.67 to 1                2.36 to 1        2.25 to 1
   Depreciation and amortization                                               $ 49,224               $   53,983       $  127,456
   Capital expenditures                                                          44,831                  147,260          205,029
   Acquisitions of businesses                                                         -                        -          125,431
   Gross margin as a % of net sales                                                33.8                     33.9             28.5
   Research, development and testing expenses (5)                              $ 77,153               $   82,661       $  127,000
Long-term debt (6)                                                              302,973                  349,766          686,986
Redeemable preferred stock                                                            -                        -              200
Common and other shareholders'  equity                                          410,128                  390,937          752,581
Long-term debt as a % of total capitalization (6)                                  42.5                     47.2             47.7
Net income as a % of shareholders' equity                                          18.5                     17.1             16.3

COMMON STOCK
Earnings per share:
   Income before extraordinary charge, cumulative effect
     of accounting changes and discontinued insurance operations               $    .62               $      .83       $      .76
   Extraordinary charge                                                               -                        -             (.04)
   Cumulative effect of accounting changes                                            -                        -                -
----------------------------------------------------------------------------------------------------------------------------------
      Income before discontinued insurance operations                               .62                      .83              .72
      Income from discontinued insurance operations                                   -                        -              .76
----------------------------------------------------------------------------------------------------------------------------------
      Net income                                                               $    .62               $      .83       $     1.48
==================================================================================================================================
Shares used to compute earnings per share                                       118,446                  118,451          118,436
Dividends per share:
   Cash dividends declared                                                     $    .50               $      .50       $      .60
   Dividend of common stock of Albemarle Corporation, at book value                   -                     3.38                -
   Dividend of common stock of First Colony Corporation, at book value                -                        -             5.72
----------------------------------------------------------------------------------------------------------------------------------
      Total                                                                    $    .50               $     3.88       $     6.32
==================================================================================================================================
Equity per share (7)                                                           $   3.46               $     3.30       $     6.36
----------------------------------------------------------------------------------------------------------------------------------

</TABLE>


<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
(In Thousands Except Per-Share Amounts)
Years Ended December 31                                                                       1992               1991
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>                <C>
RESULTS OF OPERATIONS
Net sales                                                                                   $1,692,582         $1,534,571
Costs and expenses                                                                           1,509,260          1,330,721
Special charges (1)                                                                              9,500             11,185
----------------------------------------------------------------------------------------------------------------------------
   Operating profit                                                                            173,822            192,665
Interest and financing expenses                                                                 62,279             59,097
Gain on sale of 20% of First Colony Corporation (2)                                            (93,600)                 -
Other (income) expenses, net                                                                    (1,475)            (1,652)
----------------------------------------------------------------------------------------------------------------------------
Income  before  income  taxes,   extraordinary  charge,
  cumulative  effect  of accounting changes and discontinued
  insurance operations                                                                         206,618            135,220
Income taxes                                                                                    99,373             41,168
----------------------------------------------------------------------------------------------------------------------------
Income before extraordinary charge, cumulative effect of accounting
changes and discontinued insurance operations                                                  107,245             94,052
Extraordinary after-tax charge due to early extinguishment of debt (3)                               -                  -
Cumulative effect of accounting changes for: (4)
   Postretirement health-care benefits (net of tax)                                            (34,348)                 -
   Deferred income taxes                                                                        19,616                  -
----------------------------------------------------------------------------------------------------------------------------
Income before discontinued insurance operations                                                 92,513             94,052
Income from discontinued insurance operations                                                  162,472            112,616
----------------------------------------------------------------------------------------------------------------------------
Net income                                                                                  $  254,985         $  206,668
============================================================================================================================
FINANCIAL POSITION AND OTHER DATA
Total assets - before discontinued insurance operations                                     $1,878,898         $1,570,505
Net assets of discontinued insurance operations                                                658,550            909,876
----------------------------------------------------------------------------------------------------------------------------
   Total                                                                                    $2,537,448         $2,480,381
============================================================================================================================
Continuing Operations:
   Working capital                                                                          $  327,840         $  318,716
   Current ratio                                                                             1.71 to 1          2.25 to 1
   Depreciation and amortization                                                            $  105,765         $   89,879
   Capital expenditures                                                                        157,412            166,148
   Acquisitions of businesses                                                                  136,500             24,035
   Gross margin as a % of net sales                                                               29.2               31.9
   Research, development and testing expenses (5)                                           $  111,698         $  114,732
Long-term debt (6)                                                                             711,736            810,849
Redeemable preferred stock                                                                         200                200
Common and other shareholders'  equity                                                       1,401,279          1,219,313
Long-term debt as a % of total capitalization (6)                                                 33.7               39.9
Net income as a % of shareholders' equity                                                         19.5               18.2

COMMON STOCK
Earnings per share:
   Income before extraordinary charge, cumulative effect
     of accounting changes and discontinued insurance operations                            $      .90         $      .80
   Extraordinary charge                                                                              -                  -
   Cumulative effect of accounting changes                                                        (.12)                 -
----------------------------------------------------------------------------------------------------------------------------
      Income before discontinued insurance operations                                              .78                .80
      Income from discontinued insurance operations                                               1.37                .95
----------------------------------------------------------------------------------------------------------------------------
      Net income                                                                            $     2.15         $     1.75
============================================================================================================================
Shares used to compute earnings per share                                                      118,380            118,380
Dividends per share:
   Cash dividends declared                                                                  $      .60         $      .60
   Dividend of common stock of Albemarle Corporation, at book value                                  -                  -
   Dividend of common stock of First Colony Corporation, at book value                               -                  -
----------------------------------------------------------------------------------------------------------------------------
      Total                                                                                 $      .60         $      .60
============================================================================================================================
Equity per share (7)                                                                        $    11.84         $    10.31
----------------------------------------------------------------------------------------------------------------------------

</TABLE>


(1) Special charge in 1995 consists of a provision for a  legal settlement
    ($4,150 after income taxes). 1994 consists of $10,720 primarily for a
    provision for environmental remediation as well as other costs, largely
    offset by the benefit of an $8,000 legal settlement (totalling $1,690 after
    income taxes). 1993 includes the write-down of the Canadian plant and other
    related costs of $14,200, costs of work-force reductions in the U.S. and
    Europe amounting to $7,635, and $14,315 for downsizing costs of Whitby
    Research, Inc., and relocation of employees and other related costs
    (totalling $22,400 after income taxes). 1992 includes charges for the
    relocation of the Petroleum Additives Division R&D personnel ($6,000 after
    taxes). 1991 includes expenses and write-offs of $6,350 resulting from the
    discontinuance of certain  developmental  research programs  as well  as
    expenses  of  $4,835 covering the relocation of the Petroleum Additives
    Division headquarters ($7,000 after income taxes).

(2) Resulted  from the December 1992 sale of  approximately  20% of First Colony
    Corporation stock ($30,200 after income taxes).

(3) The extraordinary  after-tax charge is the result of the early  redemption
    of the  $116,250,  9-3/8% Sinking Fund  Debentures,  net of income taxes of
    $3,000.

(4) Change in accounting  for postretirement health benefits ($54,460 before
    income taxes) and deferred income taxes in accordance with FASB Statements
    No. 106 and  109,respectively,  adopted effective January 1, 1992.

(5) Research and development  expenses  determined in accordance  with FASB
    Statement No. 2 were $54,475 for 1995,  $49,651 for 1994, $75,624 for 1993,
    $73,831 for 1992 and $69,119 for 1991.

(6) The  reduction in long-term debt in 1994 reflects $384,924 of debt
    transferred to Albemarle at the close of business on February 28, 1994.
    Excluding the debt and net assets of the businesses  spun off,  the
    consolidated  debt-to-total-capitalization  ratio at December 31, 1993,
    would have been 46.2%.  1992 includes $250 million of debt of First  Colony
    Corporation  spun off July 1,  1993.

(7) Based on the  number of common shares  outstanding at the end of each year.
    The decline in 1994 reflects the dividend of common stock of Albemarle
    Corporation of $3.38 per share at book value. The decline in 1993 reflects
    the dividend of common stock of First Colony Corporation of $5.72 per share
    at book value.